By mid-April 1989 the IRA terrorist issue had receded, but as the year wore on there was little sign of progress on any of the major areas of disagreement. The British Government's desire to let sleeping dogs lie by not upsetting Madrid led to an angry statement by Chief Minister Bossano, when military manoeuvres scheduled to take place off Gibraltar on 13 May were cancelled in case the Spanish Government interpreted them as a provocation. The official reason given for their cancellation was that it was decided that the manoeuvres, involving commandos parachuting into waters close to Spain, were not militarily necessary. However, the decision to cancel came following Foreign Office advice to the Ministry of Defence. The British military involved were clearly none too pleased at having their activities interfered with for what they saw as political reasons, but their displeasure was matched by that of Joe Bossano, who issued an official communiqué stating that the Government of Gibraltar did not share London's opinion about Madrid's possible reaction, and that in any case such considerations should not interfere with matters involving the defence of Gibraltar. For its part, the Spanish Government refused to comment.

At the beginning of June 1989 comparisons between Gibraltar and Hong Kong re-emerged, although this time they were prompted by the Gibraltarians themselves rather than by Spaniards looking for parallels. The cause was the Tiananmen Square massacre in Peking, when the authorities put down the embryonic pro-democracy movement in China in brutal fashion. The future of Hong Kong after 1997 was uncertain in any case and was now further threatened by the events in Peking.