(500 (A)

CONFIDENTIAL

CONFIDENTIAL

FM KUALA LUMPUR 111735Z JULY 79

TO FLASH FCO

TELEGRAM NÚMBER 252 OF 11 JULY

HKK 184/1

12 JUL

DESK

AND TO IMMEDIATE SINGAPORE, BANGKOK, MANIĻA,JAKARTA, HONG KONG (GOVERNOR AND BCARFE), CANBERRA, WELLINGTON

349

RY

01

BILL

YOUR TELNO 191: AIR SERVICES AGREEMENT

1.

ACCORDING TO TALALLA WHOM COUNSELLOR HAS JUST SEEN

MALAYSIAN CABINET HAVE REACTED VERY SHARPLY TO VIEW EXPRESSED

IN PARAGRAPH 2B AND POINTS MADE BY ROBERTS IN HIS DISCUSSION

WITH HASMY WHICH HAVE REACHED IT VIA MALAYSIAN HIGH COMMISSION. THEY HAVE STRONGLY DENIED THAT MOST CONCESSIONS HAVE COME FROM OUR SIDE AND CONSIDER THAT THIS CONTENTION AND ARRANGEMENTS TO RECEIVE

MANICKAVASAGAM ARE NOT CONSISTENT WITH THE GENERAL TENOR OF YOUR

DISCUSSION WITH THE PRIME MINISTER DURING YOUR VISIT HERE.

2. TALALLA SAID HE HAD BEEN ASKED TO CONVEY THE FOLLOWING

POINTS EMPHATICALLY:

(A) MANICKAVASAGAM'S BRIEF FOR HIS VISIT WAS NOT TO RETURN TO THE OLD MODE' OF DETAILED NEGOTIATIONS BUT TO HAVE A DISCUSSION WITH THE SECRETARY OF STATE FOR TRADE WHICH WOULD ENABLE US TO RESOLVE THE BASIC PROBLEM ON A POLITICAL LEVEL IN THE CONTEXT OF OUR OVERALL BILATERAL RELATIONS. AT THIS STAGE OFFICIALS AND AIRLINE SHOULD STAY IN THE BACKGROUND.

(B)

AS A SENIOR MALAYSIAN MINISTER IT WAS ESSENTIAL THAT

MANICKAVASAGAM SHOULD BE ABLE TO MEET HIS COUNTERPART IN HMG (MR NOTT) FOR AT LEAST A DAX TO DISCUSS THE BACKGROUND OF THE PROBLEM IN DEPTH AND ENSURE THAT WE WERE ON THE 'SAME WAVELENGTH'

(C) THE DISCUSSION (HE RE-EMPHASISED) MUST BE ON A POLITICAL

LEVEL AND TAKE PLACE IN THE CONTEXT OF OUR OVERALL RELATIONSHIP.

#

CONFIDENTIAL

/ UNLESS

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