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EDNESDAY, APRIL 26, 1978
ADJUSTMENT TO EXCHANGE RATE
MAY CAUSE AIR FREIGHT COSTS TO RISE
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THE SECRETARY FOR ECONOMIC SERVICES THE HON. DAVID JEAFFRESON, SAID TODAY THAT AN ADJUSTMENT OF THE HONG KONG AND U.S. DOLLARS EXCHANGE RATE IMPOSED BY THE INTERNATIONAL AIR TRANSPORTATION ASSOCIATION MIGHT RESULT IN INCREASES IN AIR FREIGHT
COSTS.
MR. JE AFFRESON WAS REPLYING. IN THE LEGISLATIVE COUNCIL TO THE HON. JAMES WU WHO ASKED IF THE GOVERNMENT WAS AWARE OF THE PROLONGED DISPUTE THE LOCAL SHIPPERS AND FORWARDERS HAD WITH IATA AND OTHER AIR CARRIERS OVER THE LATTERS IMPOSITION OF A HIGHLY UNREASONABLE AND DISCRIMINATORY+ EXCHANGE RATE OF THE U.S. DOLLARS WHEREBY HONG KONG SHIPPERS HAD BEEN MADE TO SUFFER A 21 PER CENT HIGHER AIRFREIGHT IN COMPARISON WITH OTHER EXPORTING COUNTRIES.
EXPLAINING THE SITUATION, MR. JE AFFRESON SAID THERE HAS BEEN NO INCREASE IN TRANS-PACIFIC AIR CARGO RATES SINCE 1973, ALTHOUGH AIRLINES HAVE REPEATEDLY FILED HIGHER TARIFF RATES FOR APPROVAL BY GOVERNMENTS, AND THE INCREASES IN FUEL PRICES AND OTHER COSTS SINCE THAT TIME WOULD ARGUE FOR INCREASED TARIFFS.
+SO I SUSPECT THAT IF THE IATA EXCHANGE RATE FOR THE HONG KONG AND U.S. DOLLARS WERE MORE REASONABLY ALIGNED, THEN THE GOVERNMENT WOULD HAVE TO CONCEDE CORRESPONDING INCREASES IN TARIFF RATES, + MR. JEAFFRESON SAID.
+MY GUESS IS THAT THE ACTUAL COST OF AIR FREIGHT TO SHIPPERS WOULD REMAIN MORE OR LESS AS IT IS AT PRESENT WHEN BOTH ADJUSTMENTS TO THE EXCHANGE RATES AND ADJUSTMENTS TO THE CARGO RATES HAVE WORKED THROUGH THE SYSTEM, + HE ADDED.
MR. JEAFFRESON POINTED OUT THAT THE EXCHANGE RATE FIXED BY IATA IS US$1 TO HK$5.58161, WHICH WAS FIXED DURING 1972 WHEN THE MARKET RATE STOOD AT AROUND $5.70. IT IS 21 PER CENT HIGHER THAN THE CURRENT MARKET RATE..
+THE GOVERNMENT HAS FOR SOME TIME BEEN SEEKING A MORE REALISTIC ALIGNMENT, MR, JEAFFRESON SAID. +TO THIS END WE HAVE FIRST ASKED HER MAJESTY'S GOVERNMENT, WHICH HAS A RESPONSIBILITY FOR HONG KONG IN AIR SERVICES MATTERS, TO PRESS FOR AN ADJUSTMENT.+
+SECONDLY, DURING THE RENEGOTIATION OF THE AIR SERVICES AGREEMENT BETWEEN THE U.S. AND THE UNITED KINGDOM LAST YEAR, THE HONG KONG GOVERNMENT WAS INSTRUMENTAL IN SECURING THE ACCEPTANCE BY THE U.S. GOVERNMENT OF THE NEED TO HAVE REALISTIC EXCHANGE RATES APPLIED TO TARIFFS BETWEEN HONG KONG AND THE U.S.A.
+AND THIRDLY, LAST YEAR WE FORMALISED OUR RELATIONSHIP WITH THE U.K. CIVIL AVIATION AUTHORITY WHICH HAS THE POWER TO APPROVE OR TO DISALLOW ALL TARIFFS FIXED BY IATA, AS THEY AFFECT THE UNITED KINGDOM AND HONG KONG.
/+THIS FORMALISATION
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