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discrimination, and giving the vessels of either party most favoured nation status in the ports of the other party. We have concluded that it would be imprudent to attempt to change, in a- major way, the text of the Draft Agreement which we ourselves tabled in 1976 as a basis for negotiation. In addition, our own shipowners take the view that, in the short term, the opportunit- ies for the development of shipping services (particularly containerised liner services) to and from China are more likely to arise in the ambit of regional services (eg China-Australia) than in the development of direct Europe-China services. They would prefer not to prejudice their chances of cross-trader access to these services by formal endorsement of the principle of parity of carryings in direct trades which could be quoted against us by others to our dis-benefit.
(
4 Instead we would hope to gain Chinese agreement, if necessary, to
a certain "interpretation" of the way in which the Agreement was expected to work. There are precedents in the aviation area for "understandings" which modify sometimes radically - the literal terms of Air Services Agreements. Article 17 of the Draft Agreement would provide a good basis for this sort of provision. We have used this sort of machinery to good effect in the case of our Agreement with the USSR which, while predicated upon the notion of free and fair competition, nevertheless initially worked exclusively to the benefit of the Soviets who simply made it unattractive (or downright impossible) for UK-flag vessels to carry cargo economically to and from Soviet ports. Through ongoing bilateral contacts with the Soviets, including discussions at Ministerial level, we have induced them to accept the working principle that parity of carryings as between the UK and Soviet flags is the aim to be pursued in bilateral UK-USSR maritime trades. (This does not dispose of the difficulties caused by - but that is Soviet activity as cross-traders out of UK ports another question).
The Treatment of Hong Kong
In
5 One major question is clearly whether Hong Kong can be brought within the ambit of a UK-China Bilateral Maritime Agreement. negotiations so far the Chinese side seems adamantly to have resisted Hong Kong's inclusion. The practical effects of limiting the Agreement to one between metropolitan UK and China would seem to be as follows:
(a) Treatment of vessels
would be denied The practical Hong Kong
Vessels registered in Hong Kong the benefits of the Agreement. effects of this are uncertain. carriers are trading with China at the present time and would not necessarily suffer any economic penalty as the result of formal exclusion from the terms of the Agreement. But there could no doubt be potential economic disadvantages for such operators.
And there
/ could
Maritim
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