PP HONG KONG
GR 230
CYPHER CAT A
FM DTI 191407Z
нкая
HKK 184/1
RLCENCE
PA
R.
Action Teen
BY
DX OFFICEH
INDEX
No 1 d
531
fu
ст
мудром
CONFIDENTIAL
TO PRIORITY HONG KONG (FOR GOV) TELNO ALLOT 138 OF 19 SEPTEMBER INFO HONG KONG (FOR BCARFE) AND WASHINGTON
398 HONG KONG US CURRENCY PROBLEMS YOUR TELNO 1054 PARA 2 REFERS. IT IS CLEAR TO US GIVEN THE PRACTICAL SITUATION WHICH YOU DESCRIBE IN PARA 1 OF TELEGRAM UNDER REFERENCE AND YOUR REMARKS IN PARA 2 WHETHER YOU STILL WISH US TO PRESS THE AMERICANS ON THIS ISSUE. IF YOU CONFIRM THAT YOU DO WE PROPOSE TO PRESS AHEAD IN SEEKING A NEGOTIABLE SOLUTION IN THE MANNER SO FAR ADOPTED UNLESS YOU HAVE OTHER THOUGHTS ON THE MEANS OF ACHIEVING A SATISFACTORY OUTCOME.
IT IS HARDLY VALID TO DRAW A PARALLEL BETWEEN THE HONG KONG/ US FARES SITUATION AND THAT PERTAINING TO THE HONG KONG/U K CABOTAGE FARES. THE CAA NOTE OF 4 AUGUST WHICH ACCOMPANIED REED'S LETTER TO DOWNING OF 8 AUGUST AND WHICH HAD BEEN DISCUSSED IN DETAIL WITHIN THE DOT BEFORE IT WAS SENT GOES INTO CONSIDERABLE DETAIL CONCERNING DISPARITIES BETWEEN UK AND HONG KONG SELLING PRICES AND THE MEASURES THAT HAVE BEEN AND ARE BEING TAKEN TO MINIMISE THESE DISPARITIES. THE RESULTS OF ECONOMIC ANALYSES GIVEN IN PARA 14-16 OF THAT NOTE DEMONSTRATE CLEARLY THE CLOSE RELATIONSHIP BETWEEN COSTS AND HONG KONG SELLING FARES, WE SEE NO REASON TO HAVE QUALMS ABOUT INCONSISTENCY IN CONTINUING TO PRESS THE AMERICANS.
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