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b) Effect on other countries in the region. If other South-East Asian countries see Britain refusing CPA access to the UK, this will encourage such countries to take a much harder line in negotiations involving CPA for regional routes in the area. They will believe in other areas that the UK will not be prepared to support CPA very far.
c) Commercial relations with Hong Kong. These are not
altogether easy. The forthcoming MFA negotiations will cause strains. These will directly affect the DOT. It would be unwise to aggravate the problem by an unfavourable decision on air services.
d) Political relations. The CAA's decision has brought criticism in Hong Kong on the lines that it reflects "colonial" status. This may appear absurd here but the feeling is a political fact. We need to be very careful to be seen to treat Hong Kong fairly. This is particularly
so because there are other problems such as the negotiations on the Defence Costs Agreement, which will cause additional strains.
I would be grateful to have the answers to the technical questions and to see an outline of these and other political
This will of course arguments by close of play on 27 March.
be without prejudice to discussions on what action to take in support of Hong Kong, which will have to take account of the telegram promised in Hong Kong Telegram No 425.
R D Clift
24 March 1980
CC
Miss Stoddart MAED
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Hong Kong and General Department
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