1

Registry No.

SECURITY CLASSIFICATION

Top Secret,

Secret.

Confidential.

Restricted.

Unclassified.

PRIVACY MARKING

In Confidence

DRAFT

To:-

CONFIDENTIAL

LETTER

M S Morris Esq

Assistant Under Secretary

Shipping Policy Division

Department of Trade

1 Victoria Street

London SW1

Type 1 +

From

Miss Brown

Telephone No. Ext.

Department

UK/CHINA SHIPPING

DSR 11

:

1.

Since we met on 14 February, I gather that our

people have been in touch and have been able to

reach agreement without any difficulty on the line

that British officials should take with the Chinese

during Mr Varley's visit to persuade the Chinese to

give us what we want on cargo sharing. I understand

that the brief takes the line that we stand the best

chance of achieving our objectives for some time if we

try to get them under the Economic Co-operation

Agreement using all the leverage which Mr Varley's

visit provides. By the same token, therefore, we

should not give the Chinese the opportunity to

defer consideration of our ideas to another round

in the talks about the Maritime Agreement. Of course,

if we do not get what we want under the ECA we can

try to obtain it under the Maritime Agreement, but

clearly with less political leverage and more

potential problems over Hong Kong, the prospects

will not be very good.

2. These general lines were set out in Richard Samuel's

letter of

February to Arthur Pryor which I

gather you hadhot seen at the time of our meeting.

I am

sure that this is the right way to proceed and

that the next move is to wait and see what news

comes out of the Varley visit. We can then take a

further look at the situation.

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