RESTRICTED
DSR 11C
15. Thus interpretation (a) produces the absurd result that cabotage rights which are recognised as peculiarly sensitive and of particular interest to States since they connect points within a State's territory, must under Article 7, if granted at all, be granted on a more liberal basis than rights granted by a State for international routes. As regards the latter, States are free to bargain, withhold or impose conditions as they please.
15. The legislative history of Article 7 is set out in detail in Fart I of Appendix A to the ICAO Secretary Secretary General Faper C-MP/4460. The original American proposal is set out on p 9 and this was carried into a tripartite US/UK/Canada proposal on p 12. In presenting its original proposal (see p 13) the United States said that the purpose was to establish a non-discriminatory rule for cabotage and to avoid a pooling of cabotage 'betweeg a number of countries which would exclude nations not parties to the pool. The United Kingdom also said that it would be a great advance if we could agree that there should be no discrimination in our practices. (See p 14) This suggests that at this stage the draft was intended to be non-discriminatory and that the US probably would have supported interpretation (a). However the text at this stage, and in the second and third revised drafts, did not include the words "enter into any arrangements which specif ically". At the meeting of 30 November (see p 16) the United Kingdom and others suggested deletion of the key sentence, which requires explantion since it had been in the tripartite text referred to above. One possible explanation is that at this stage Article 6 had ceased to contain a multilateral
exchange of rights for scheduled services and now left such rights within exclusive grant of each State. Deletion of the second sentence of Article 7 would do the same for cabotage, which States could be expected to safeguard even more jealously. At any rate it is clear that the original proposal was no longer acceptable to the United Kingdom. The Sub-Committee however agreed to include the sentence, subject to adding the words "enter into any arrangements which .specifically" before "grant" and omitting "any" after "grant". This suggests that the addition of these words was meant to be significant in that it represented a compromise between the UK and others who wanted deletion and, presumably, the US and others who
/wished
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