CONFIDENTIAL
WHITS 041/2
TOP COPY Q DIST?
MAU
156576
MDHIAN 2094
CONFIDENTIAL
FM WASHINGTON
TO IMMEDIATE FCO
TELNO 2731
OF 11221OZ DECEMBER 92
INFO PRIORITY HONG KONG, PEKING, UKREP JLG HONG KONG, ACTOR
140
HONG KONG TELNO 2880 TO YOU: PRESIDENT-ELECT CLINTON AND CHINA/MFN
1. AS THE GOVERNOR KNOWS, WE HAVE BEEN WORKING HERE ON ACTUAL AND POTENTIAL KEY MEMBERS OF THE CLINTON TEAM ON CHINA, HONG KONG AND MFN. AS REPORTED IN MY TELNO 2693 WE ARE IN NO DOUBT THAT THEY ARE SENSITIVE TO THE CRITICAL IMPORTANCE OF THIS ISSUE FOR HONG KONG. WE HAVE IMPRESSED ON THEM THAT AN EXEMPTION FROM ANY THREAT TO MFN RELATING ONLY TO EXPORTS FROM HONG KONG AND NOT TO RE-EXPORTS STILL, IF IT CAME TO BE IMPLEMENTED, WOULD INFLICT POTENTIALLY SERIOUS DAMAGE ON THE ECONOMY OF HONG KONG.
2=
SEVERAL MEMBERS OF THE CLINTON TEAM SAY THAT THEY DO NOT WANT TO END UP ACTUALLY HAVING TO IMPLEMENT PARTIAL WITHDRAWAL OF MFN FROM CHINA. BUT THEY SAY THAT CLINTON WILL NOT CONTINUE THE BUSH POLICY OF UNCONDITIONAL RENEWAL OF MFN. THE LIKELY OUTCOME IS THAT IN JUNE EITHER CONGRESS OR THE PRESIDENT WILL LAY DOWN SOME CONDITIONS (E.G. RELEASE OF PRISONERS) WHICH CHINA SHOULD MEET IN ORDER TO SECURE BLANKET RENEWAL OF MEN IN 1994. WE HOPE THAT THESE CONDITIONS WILL BE AS LIGHTLY DRAWN AS POSSIBLE, THAT THEY WILL GIVE MAXIMUM DISCRETION TO THE PRESIDENT OVER HOW TO REACT AND THAT THEY WILL MAKE CLEAR THAT, IN ANY EVENT, HONG KONG WILL BE PROTECTED.
3=
AGAINST THAT BACKGROUND, AS SEEN FROM HERE, THERE IS NO HARM IN THE GOVERNOR'S STRESSING THE IMPORTANCE OF RENEWAL OF MFN AND EVERY ADVANTAGE IN HIS STRESSING THE CRITICAL IMPORTANCE OF THIS FOR HONG KONG. BUT PLACING TOO MUCH STRESS ON THE WORD UNCONDITIONAL WILL BE LIABLE TO EXPOSE US TO CHARGES OF HAVING SUFFERED A SET-BACK LATER.
4. WE ARE CONCERNED TO TRY TO SECURE A MEETING BETWEEN THE GOVERNOR AND THE NEW PRESIDENT. CLINTON IS VERY FAVOURABLY DISPOSED TO THE GOVERNOR'S PROPOSALS FOR DEMOCRATISATION IN HONG KONG AND THAT SHOULD ENCOURAGE HIM TO AGREE TO A MEETING. BUT THERE ALSO IS A STRONG DOMESTIC POLITICAL DIMENSION TO THIS. IF THE MAIN PURPOSE OF A MEETING, FROM OUR POINT OF VIEW, WERE SEEN AS
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