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4. WE ARE ALSO NOT CLEAR ON SIGNIFICANCE OF MAKING UNDERSTANDING CONDITIONAL UPON INITIALLING TAKING PLACE WITHIN ONE MONTH, RATHER THAN TYING IT TO DATE OF SIGNATURE OR DATE WHEN SERVICES ARE PERMITTED TO START. ON PRESENT EXPECTATIONS, THE CUT f DATE WOULD ALSO FALL AWKWARDLY IN THE MIDDLE OF A TRAFFIC PERIOD. ANY BACKGROUND INFORMATION YOU CAN GIVE US ON THIS WOULD BE HELPFUL.
5. THIS UNDERSTANDING ALSO HAS IMPORTANT CONSEQUENCES FOR OUR FUTURE NEGOTIATING STANCE. THESE ARE OUTLINED IN PARAS 6 TO 13
BELOW.
6.
THE CHINESE THEMSELVES WANTED A LIMITED PERIOD FOR BA'S OPERATIONS WITH RIGHTS VIA HONG KONG (PARA 2 OF MY TELNO.470).
ONE OF OUR MAJOR ACHIEVEMENTS HAS BEEN TO CONVINCE THEM THAT THIS
WOULD NOT BE REALISTIC. HAD WE BEEN WILLING TO CONCEDE AS EARLY
A DATE AS 1983 FOR BA'S COMPLETE WITHDRAWAL WE COULD HAVE SECURED
A CORRESPONDING ADVANTAGE ELSWHERE IN THE PACKAGE. WE CANNOT
EXPECT TO GET FULL VALUE FOR THIS CARD IF WE PLAY IT NOW,
OBLIGATION TO ACCEPT A HONG KONG BASED CARRIER ON THE HONG KONG-
PEKING ROUTE WHEN BA WITHDRAW MAY MAKE CHINESE LESS ANXIOUS TO SEE THIS HAPPEN QUICKLY. HOWEVER, FOR REASON GIVEN IN PARA 7 BELOW THE CARD IS LIKELY SOON TO BE WORTHLESS. WE WONDER WHETHER
YOU WOULD THEREFORE SEE ANY OBJECTION TO OUR THROWING IT IN IF
WE CAN GET EVEN A MODEST CONCESSION IN RETURN ?
7. WE SHALL OF COURSE TAKE GREAT CARE NOT TO REVEAL TO THE CHINESE THE UNDERSTANDING IN LINES 14-17 OF PARA 2 OF TUR. BUT THE CHINESE HAVE EXCELLENT SOURCES OF INFORMATION AND IT IS NOT TO BE SUPPOSED THAT THIS CAN BE KEPT FROM THEM FOR LONG. THEY WILL THEN HAVE EVERY INCENTIVE TO MANIPULATE THE .CMU (ESPEC- IALLY THE REVIEW PROVISIONS) WITH THIS FACTOR IN MIND. WE SHALL NEED TO DO OUR BEST TO GUARD AGAINST THIS IN ADVANCE.
9. THIS APPLIES PARTICULARLY TO THE LIMITATION OF END TO END PASSENGERS ON THE TRUNK ROUTE TO THE EQUIVALENT OF A 3707 166_CAPACITY (PARA 3(1) OF OUR TELNO.552), THIS ARRANGEMENT RELIES
APA
ON MUTUAL ADVANTAGE OF REMOVING THIS RESTRICTION AS THE TRAFFIC GROWS, AND ON THE FACT THAT, IN THE LAST RESORT, WE COULD HAVE REFUSED TO WITHDRAW BA FROM HONG KONG ROUTEING UNTIL RESTRICTION WAS WITHDRAWN. HOWEVER, BA'S OBLIGATION TO WITHDRAW COMPLETELY
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