TNAG-2913-FCO40-4188-International-support-from-the-USA-regarding-the-future-of-H-1993 — Page 10

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THE GOVERNOR WOULD SAY IN WASHINGTON COLES DOUBTED WHETHER HE WOULD SEEK PUBLIC ENDORSEMENT FROM THE US ADMINISTRATION OF THE DETAILS OF HIS PROPOSALS DURING HIS VISIT TO WASHINGTON. THIS COULD BE COUNTER-PRODUCTIVE WHEN TALKS WITH CHINA WERE IN TRAIN SINCE CHINA WOULD FEEL OBLIGED TO REACT STRONGLY.

5.

LORD SAID THE US WANTED TO BE HELPFUL. THEY WOULD FOLLOW THE UK'S LEAD. AS THE SITUATION DEVELOPED THEY WOULD WELCOME ADVICE ON WHAT WOULD AND WOULD NOT BE USEFUL. HE WOULD TRY TO EXPEDITE A DECISION ON A MEETING BETWEEN THE GOVERNOR AND THE PRESIDENT.

MEN

6.

COLES ASKED ABOUT CURRENT THINKING ON MFN. HE POINTED OUT THAT IF MFN WAS REVOKED, HONG KONG'S GDP GROWTH RATE WOULD BE HALVED. IF THE ADMINISTRATION DECIDED ON CONDITIONAL RENEWAL, HE HOPED THAT VERY CAREFUL ATTENTION WOULD BE PAID TO THE EXACT NATURE OF THE CONDITIONS. UNLESS THEY WERE FRAMED IN SUCH A WAY AS TO GIVE CHINA SOME PROSPECT OF MEETING THEM, THERE WOULD BE A BIG PROBLEM A YEAR FROM NOW.

7.

LORD SAID MFN POLICY WAS STILL EVOLVING. THE PRESIDENT WAS ON RECORD AS FAVOURING CONDITIONALITY. BUT HE HAD NO INTENTION OF ISOLATING CHINA. HE UNDERSTOOD THAT WITHDRAWING MFN WOULD HAVE SERIOUS CONSEQUENCES FOR HONG KONG, TAIWAN, US BUSINESSES, AND THE VERY PEOPLE IN CHINA HE WANTED TO SUPPORT.

8.

ON THE OTHER HAND, MFN WAS THE BEST US LEVERAGE ON CHINA. ALTHOUGH THE ADMINISTRATION WERE NOT SAYING SO PUBLICLY, THEIR STRATEGY WAS TO TRY TO MAKE PROGRESS WITH THE CHINESE BETWEEN NOW AND THE MFN DEBATE. THEY HAD STARTED TALKING TO THE CHINESE. PROGRESS WOULD HELP THEM TO WORK WITH CONGRESS ON GOING FORWARD WITH MFN. BUT LORD DOUBTED WHETHER SUFFICIENT PROGRESS WOULD BE MADE TO JUSTIFY UNCONDITIONAL RENEWAL. THE KEY WOULD BE THE KIND

OF CONDITIONS TO BE ATTACHED.

9.

LORD SAID THAT THERE WOULD NO DOUBT BE A DEBATE IN CONGRESS OVER THE SORTS OF CONDITIONS, AND OVER HOW TO MEASURE PROGRESS. BUT THOSE WHO WANTED TO REVOKE MFN WERE A MINORITY. THE ATTITUDE OF KEY FIGURES (MITCHELL AND PELOSI) WOULD BE CRUCIAL. HE UNDERLINED THAT HUMAN RIGHTS WAS NOT THE ONLY ISSUE: THERE WERE STRONG FEELINGS ON THE HILL ABOUT PROLIFERATION, AND ABOUT THE TRADE DEFICIT (DOLLARS 18 BILLION AND LIKELY TO INCREASE NEXT YEAR). BUT, IN THESE AREAS, CONGRESS WAS NOT

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