CONFIDENTIAL
030330
MDLOAN 0722
w
AND THAT
LEGISLATION BUT MORE EFFECTIVE ENFORCEMENT BY THE I.R.S THEY ARE AIMING MAINLY AT ILLEGITIMATE TRANSFER PRICING BY THE JAPANESE CAR MANUFACTURERS. BUT CLINTON'S DOMESTIC TEAM ARE UNRECONSTRUCTED ON THIS SUBJECT. THE IDEA THAT MORE MONEY CAN BE RAISED FROM FOREIGN CORPORATIONS FIGURED PROMINENTLY IN HIS T.V. CAMPAIGN. MORE WORK IS GOING TO HAVE TO BE DONE TO BRING HOME TO CLINTON'S PEOPLE THE DAMAGE UNCERTAINTY IN THIS AREA COULD DO TO INVESTMENT IN THE U.S. AND THE U.S. ECONOMY.
NORTHERN IRELAND
10. GIVEN HIS TENDENCY TO PANDER TO SPECIAL INTEREST GROUPS, CLINTON WILL BE LESS RELIABLE ON THIS SUBJECT THAN BUSH. HE HAS EXPRESSED CONCERNS ABOUT THE QUOTE USE OF LETHAL FORCE UNQUOTE BY THE SECURITY FORCES AND SAID THAT HE MIGHT APPOINT A PEACE ENVOY (E.G. MAYOR FLYNN OF BOSTON). WE HAVE POINTED OUT, VIGOROUSLY, TO HIS CAMPAIGN THAT TALKS ARE TAKING PLACE UNDER THE AUSPICES OF THE SECRETARY OF STATE FOR NORTHERN IRELAND, SO IT IS HARD TO SEE WHAT USE A PEACE ENVOY COULD BE. WE HAVE TOLD ALL HIS KEY ADVISERS THAT THE WRONG SORT OF STATEMENTS ON THIS ISSUE WOULD PRODUCE VERY ADVERSE REACTIONS ACROSS THE POLITICAL SPECTRUM IN BRITAIN. WE EXPECT HIM TO BE MORE CAUTIOUS ONCE IN OFFICE.
CHINA/MFN
11. WE SHALL CONTINUE TO IMPRESS ON THE CLINTON TEAM THE DAMAGE THAT WOULD BE DONE TO THE HONG KONG ECONOMY BY ILL-CONSIDERED
ACTION TO WITHDRAW MFN STATUS FOR CHINA. THEY SAY THAT THEY ARE ANXIOUS TO MINIMISE THE IMPACT ON HONG KONG BUT THAT IF THERE IS NO IMPROVEMENT IN THE CHINESE PERFORMANCE ON HUMAN RIGHTS, CLINTON WILL NOT OPPOSE MOVES IN THE SENATE TO WITHDRAW MFN FROM CHINA.
THIS IS AN ISSUE ON WHICH CLINTON APPEARS DETERMINED TO SHOW HIMSELF DIFFERENT TO BUSH.
BA/USAIR
12. CLINTON HAS SAID THAT HE WOULD NOT APPROVE THE BA/USAIR AGREEMENT BECAUSE QUOTE WE GET NO ACCESS TO THE BRITISH MARKET UNQUOTE. THIS IS SIMILAR TO THE LINKAGE THE PRESENT ADMINISTRATION IS MAKING BETWEEN APPROVAL OF THE AGREEMENT AND CONCESSIONS TO THE UNITED STATES ON AIR SERVICES.
RENWICK
ENDS
HURD
3
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