TNAG-1551-FCO40-2115-Possible-cultural-agreement-between-Hong-Kong-and-Japan-1986 — Page 31

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5. WE HAVE BEEN ACTIVELY CONSIDERING THIS PROPOSAL AMONG BRANCHES

HERE SINCE MATSUURA'S APPROACH. OUR INITIAL FEELING IS THAT

ADDITIONAL MONEY IS ATTRACTIVE BUT THAT THE AMOUNT IN QUESTION "S

NOT OF SUCH AN ORDER THAT WE SHOULD MOVE MOUNTAINS TO OBTAIN HET.

WE SEE A NUMBER OF PROBLEMS THAT WILL NEED FURTHER THOUGHT AND

FURTHER EXPLORATION OF JAPANESE INTENTIONS AND REQUIREMENTS BEFORE WE CAN REACH A DECISION ON THE DESIRABILITY OF AN AGREEMENT. ON CLOSER EXAMINATION THE PNG MODEL LOOKS VERY UNSATISFACTORY. T ENVISAGES A HIGH DEGREE OF GOVERNMENT INVOLVEMENT IN THE DISBURSEMENT OF THE MONEY AND SUPERVISION OF THE INSTITUTIONS SPENDING IT. WE, HOWEVER, WOULD WANT TO HAVE MINIMAL GOVERNMENT INVOLVEMENT IN THE USE OF FUNDS BY OUR UNIVERSITIES WHO, IN TURN, ARE RIGHTLY PROTECTIVE OF THEIR AUTONOMY. ALSO, THE PNG AGREEMENT SPECIFIES THAT THE JAPANESE AND SHOULD BE USED TO PROCURE EQUIPMENT

FROM JAPAN. WE WOULD NOT WISH TO SEE THIS IN ANY AGREEMENT THAT WE

SIGNED WITH JAPAN (AND IT COULD INDEED ARGUABLY HAVE IMPLICATIONS

FOR OUR WIDER TRADE OBLIGATIONS UNDER THE GATT). THERE ARE ALSO

PROVISIONS IN THE PNG AGREEMENT, FOR EXAMPLE EXEMPTION FROM TAXES

THAT COULD CAUSE US DIFFICULTIES OF A SORT THAT WOULD NEED

LEGISLATION TO OVERCOME.

6. OUR INITIAL CONCLUSION IS THAT WE ARE IN PRINCIPLE INTERESTED

IN THE OFFER OF FINANCIAL ASSISTANCE AND THAT WE DO NOT RULE OUT

A CULTURAL AGREEMENT F, AS SEEMS TO BE THE CASE, THIS IS A

PREREQUISITE FOR MORE JAPANESE FUNDS. HOWEVER, THE SORT OF

AGREEMENT WE WOULD PREFER WOULD BE A GOVERNMENT TO GOVERNMENT

(HONG KONG/JAPAN) ''UMBRELLA'' PROVIDING FOR THE JAPANESE TO -

DEAL DIRECTLY WITH THE INSTITUTIONS ON ALL DETAILED SUBSTANCE OF

THE ASSISTANCE OFFERED. SHORT OF THIS DEAL, WE WOULD LOOK FOR AN

AGREEMENT THAT INVOLVED A MINIMUM OF GOVERNMENT SUPERVISION AND

ADMINISTRATION.

7. THE POLITICAL ADVISER HAS ALREADY INTIMATED TO THE JAPANESE

CONSUL GENERAL THAT, GRATEFUL AS WE ARE, THE MATTER IS NOT ENTIRELY STRAIGHTFORWARD. MATSUURA HAS APOLOGIZED FOR GIVING US SO LITTLE TIME TO PREPARE FOR A SUBSTANTIVE RESPONSE DURING THE GOVERNOR'S VISIT TO TOKYO. HE HAS CONFIRMED THAT INT WAS NEVER THE JAPANESE INTENTION (FIRST SENTENCE OF TUR NOTWITHSTANDING) THAT AN INSTRUMENT OF AGREEMENT BE SIGNED DURING THE WISHT.

8. DURING A FURTHER CALL ON THE PA THIS AFTERNOON MATSUURA AGREED READILY THAT DISCUSSION OF A NEW JAPANESE SCHEME DURING THE GOVERNOR'S VISIT WOULD BE PREMATURE. THE JAPANESE FOREIGN MINISTER WILL BE BRIEFED TO MENTION IN VERY GENERAL TERMS JAPAN'S WISH TO BUILD ON THE CURRENT ASSISTANCE EXTENDED TO HONG KONG UNIVERSITY AND CONTEMPLATED FOR THE CHINESE UNIVERSITY. WE SHALL RECOMMEND THAT THE GOVERNOR EXPRESS HIS APPRECIATION TO MR ABE FOR EXISTING SUPPORT FROM THE JAPAN FOUNDATION AND FOR THE INTEREST SHOWN IN THIS SUBJECT AREA BY THE JAPANESE CONSUL GENERAL, COUPLED THIS

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