But see
освою
LA
ด
Mr McLaren
4KK.
Mar0
CONFIDENTIAL
IND
2 0 JUN 1979
UK/CHINA AIR SERVICES AGREE
GREEMENT
Problem
1.
KY
BS/Mr. Bloker.
•My Mckeren, HKGD
I think mis haz
now been resolved?
вам
BAM 1516
M
Cary. Ps/Mr Hurd
or Cartazzi
Miss Brown.
Negotiations with the Chinese for an Air Services Agreement have now reached the stage where we must choose between accepting an agreement that falls short of our original objectives or break- ing off the negotiations.
Recommendation
2. I recommend that Mr Blaker should discuss the subject with the
Governor tomorrow to ensure that there are no overriding objections from the Hong Kong point of view, but providing there are not should authorise us to inform the Department of Trade that we agree with
the recommendation in HM Ambassador Peking's telegram No 553 that
we should accept the first of the four options set out in Peking telegram No 552. FED and MAED concur.
Background
3. A team led by Mr Rogers of the DOT have been in Peking for over three weeks trying to reach an agreement that would give us a balanced share of the traffic not only on the trunk route between
London and Peking but also on regional routes between Hong Kong and points in China. It is now clear that, while the Chinese are pre- pared to accept full reciprocity on the trunk route, they are not prepared to concede any more on the regional routes than one-third of the traffic between Hong Kong and Shanghai and an undefined (but certainly minority) share of traffic on the Hong Kong to Peking sector, in return for which they expect not only the lion's share
on these routes but also exclusive rights on three or four other routes. The choice before us is either to accept this package, accept an agreement on the trunk route only leaving the regional routes to be discussed later, or to break off the negotiations with no agreement at all at this stage. As the Peking telegrams argue, the second of these options would only be worth pursuing if there was any likelihood of our getting a better deal in future, or if we
/felt
CONFIDENTIAL