CONFIDENTIAL
5. Lord Carrington said that the main danger was that participants would become excited and go overboard on an extreme line, thus making it impossible for Britain to make progress. There were wide differences between the attitudes of various African states, and some were much more inflexible than others. He was looking for a solution which would do the minimum damage to all concerned.
He recognised that Britain was walking a tightrope and might fall off. But he hoped that we would not be pushed off by our friends.
CONCORDE ROUTE TO AUSTRALIA
6.
Lord Carrington, referring to the fact that Mr Fraser had raised the subject with Mrs Thatcher in Canberra, said that, while we would welcome a through Concorde service to Australia, the decision was primarily a commercial one for British Airways and Qantas. He under- tood that British Airways considered that Hong Kong was likely to be more attractive commercially than Melbourne, and also that Qantas had reservations about the Singapore/Melbourne service. Mr Peacock said chat Mr Fraser (and Mr Nixon, the Minister of Transport) regarded the principle of a Concorde service to Melbourne as important.
At present, if one flew by Concorde to Singapore, the services were designed to ensure a long stopover in Singapore before an onward flight was available. This favoured what he called the "Jumbo preservation society".
CIVIL AVIATION
7. Lord Carrington asked how the Australian negotiations with ASEAN countries over the cheap advance fares were going. He stressed that Britain would expect Australia to make no further con- cessions to ASEAN, but in any case to consult Britain before considering to do so. He also stressed that Britain saw no reason why the implementation of new fares on the Australian/Hong Kong route should be delayed until after the next ASEAN meeting, now postponed to September.
8. Mr Peacock explained the background of recent Australian negotiations with ASEAN countries on the UK/Australia trunk route. He had urged Mr Nixon not to announce new fares on the Hong Kong/ Australia route while difficulties with ASEAN countries over the UK/Australia route remained unresolved. The latter should have gone before the meeting of ASEAN Ministers in July, but this would not now take place before August/September. He had therefore told Mr Nixon that he was free to announce the new Hong Kong/Australia fares when he wished.
BANABANS
9. After Lord Carrington had expressed our concern about the question of interest on the offer of A$10 million, Mr Peacock said that, for the past 2 years, FCO Ministers had always told him that a settlement was imminent and could be completed if Australia would agree to make a further concession. Australia had made concessions, but a settlement had not yet been reached. Personally, he regarded the whole Banaban campaign as a racket. If the Banabans could be told that they must complete negotiations within, say, 30 days, this would give him a pretext for going back to Cabinet. Otherwise, he feared
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