TNAG-1255-FCO40-1588-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 213

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CONFIDENTIAL

Residence when she will make a major speech.

The Prime

Minister leaves Washington on the morning of 30 September

[for New York/London].

2. By the time the Prime Minister arrives in Washington,

5

Preident Reagan may well have made up his mind whether to

stand for re-election in 1984, though for tactical

reasons he may make no announcement for a further few

weeks. The balance of probability is that he will run

again in spite of his age and the prospect that in 1984

the Senate may follow the House of Representatives in

falling to the Democrats. Mr Reagan is the only

Republican candidate who stands a reasonable chance of

success against the main Democrat contenders (Mr Mondale

and Senator Glenn).

3.

The President's personal popularity is higher now

than at the beginning of the year, partly as a

consequence of a significant improvement in the economy.

More recently he has gained widespread approval for his

handling of the KAL airliner incident although he is

having to weather considerable pressure led by the right

wing of the Republic party for further action against the

Soviet Union. The same circles have also found fault

with his attempts to win bipartisan support for his

policies on defence and disarmament questions and on

Central America.

4. Recently much has been made by the media of

divisions within the Administration on the handling of

foreign affairs and there have been suggestions that the

Judgɛ President's National Security Adviser, Joe Clark, may be

seeking to usurp the authority of Mr Shultz.

CONFIDENTIAL

Although