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FM F C O 231000Z MAR 79
IN.
TO IMMEDIATE GOVERNOR AND DCARFE HONG KONG TELEGRAM NUMBER 205 OF 23 MARCH
AND SAVING TO WASHINGTON PEKING
UK/US AIR SERVICES AGREEMENT: PROHIBITION ON US CARRIERS
SERVING HONG KONG AND POINTS IN THE PRC
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1. WE HAVE BEEN RECONSIDERING OUR POSITION ON THE PROHIBITION
Oy US CARRIERS SERVING POINTS IN THE PRC BEYOND HONG KONG (NOTE 8 OF SECTION 5 OF ANNEX 1 OF BERMUDA 2). WE NO LONGER CONSIDER THAT EITHER THE TAIWANESE OR THE PRC AUTHORITIES WOULD BE
SERIOUSLY OFFENDED IF WE WERE TO REMOVE THIS RESTRICTION ON US
AIRLINES AND WE CAN SEE NO VALID AVIATION GROUNDS FOR CONTINUING
TO DENY THEM THIS FACILITY BECAUSE IT INVOLVES NO ADDITIONAL
TRAFFIC RIGHTS FOR US CARRIERS. WE ALSO THINK THAT, GIVEN THE OPPOSITION TO BERMUDA 2 IN CERTAIN QUARTERS IN THE US, IT WOULD
BE POLITIC TO GIVE GROUND TO THE AMERICANS ON RELATIVELY MINOR ISSUES SUCH AS THIS, WHILST ROBUSTLY DEFENDING MAJOR ISSUES, EG SUCH AS LIMITED MULTIPLE DESIGNATIONS CAPACTY, TARIFFS CONTROLS AND LIMITATION OF PRACTICAL FIFTH FREEDOM RIGHTS FOR US CARRIERS.
2. SUBJECT TO YOUR VIEWS WE ARE THEREFORE READY TO REMOVE THIS RESTRICTION AND WOULD LIKE TO TELL THE AMERICANS THAT WE ARE PREPARED TO DO SO AT THE NEXT ROUND OF UK/US TALKS ON NORTII ATLANTIC CARGO SERVICES IN LONDON NEXT WEEK (27-30 MARCH). GRATEFUL FOR YOUR CONSIDERED VIEWS BY 261800Z.
OWEN
FILES
MAED
HK & GD
FED
NAM D
LEGAL ADVISERS
MISS BROWN
MR MURRAY
[COPIES SENT CAD/DOT]
CONFIDENTI AL