TNAG-1461-FCO40-1987-Future-of-the-Dependent-Territories-Hong-Kong--Gibraltar-and-1986 — Page 62

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the area, dubious investment deals, and difficulties with

UK/US relations because of jurisdictional and political

conficts that have arisen between US extra territorial

claims and banking secrecy). It is possible that the conclusion of the UK/Cayman/US Mutual Legal Assistance

Treaty will in the long run lead to a more secure financial future without these continual conflicts, and will make the

Cayman Islands more attractive to reputable and established

businesses. It is intended that all the Caribbean dependent territories (except Bermuda) should eventually have similar agreements with the US;

(g) one constant rather than new factor which has always

affected the prospects of the Caribbean dependent territories in particular, is the effect which tourism has

on the economies of these territories as a variable but

constant source of revenue.

IV THEORETICAL OPTIONS

8.

Several theoretical options, ranging along the spectrum fromn abandoning our responsibility to a close continuing relationship,

are considered here for the 12 dependent territories. In practice

some are not realistic options for the Territories, others are not serious options in the short-term but could be feasible in the long term. Nevertheless, each option is described in general and, where relevant, considered with a particular territory in mind.

9. Separate Independence : this was suggested by the 1973 review

for dependent territories not affected by unresolved territorial claims, continuing treaty obligations or HMG's requirements. Special inducements to become independent in the face of persistent local reluctance were considered eg aid guarantees, minimal defence arrangements or offers of overseas representation on independence

along the lines of the 1962 New Zealand treaty with Western Samoa,

This provides that New Zealand consults on matters of mutual

interest and concern, undertakes consular protection and acts as an

agent in foreign affairs when requested to do so. In the case of

defence arrangements, the need to secure a guarantee from a friendly

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