TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 17

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State Department were fully supplied with current statistics. In 1989 the view in Washington had been that the CPA should be given time to work but it was probably not producing sufficiently effective answers now. Mandatory repatriation remained very difficult for Washington.

6.

I explained to Mr Seitz that the implications for Hong Kong's economy of a decision not to renew MFN status for China would be serious. The Hong Kong Government was effectively advancing its case in Washington. Mr Seitz said that he doubted whether the Hong Kong dimension was either well understood in Washington or whether it would have much influence on the eventual decision. The opposition to MFN renewal this time round was more complex and stronger. The President's instincts were to work for co-operation with China but Mr Seitz would personally not rate the chances of renewal very high.

7.

I said that while the Secretary of State had not yet taken a view on the agenda for his working lunch with Mr Baker next week, I thought it possible that he might wish to refer to this complex of Hong Kong issues. Mr Seitz said that he hoped there would be time; there was a great deal to discuss.

8.

I told the Ambassador that his No. 2 had suggested to me last week that we should have periodic meetings to review a check-list of issues in the US/UK relationship, not so much. with a view to treating their substance as to ensure that each side was aware of what was on the other's mind and to facilitate co-ordination. Mr Seitz agreed that this was worth doing.

Without prompting by me, he expressed concern about the situation in Canada. Canadian institutions were not working. The outcome of the Constitutional debate was uncertain. Some difficult decisions on defence confronted

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the Canadian Government.

10.

With regard to President Bush's health, the Ambassador said that the net result would probably be to sharpen the debate about the Vice-President's position. The President was never disposed to treat his colleagues with anything other than consideration and courtesy but the debate might not go away.

The Vice-President had learned a great deal since coming to the job and had shown a considerable knowledge of British politics when Mr Seitz had called on him before leaving Washington.

Sohn Coles.

Sir John Coles

JC1ACK

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