Our Reference; Your Reference:
40
た
Ar. Stewart
s chính tre sho
s
reply to Nr. Lucas
that the quid pro quo
Rar
Treasury Chambers
Great George Street, London, S.W.I Telephone: Whitehall 1234, ext.
we get out of this is the disposal of 3rd July, 1969.
Traffic rights at Kai Tah
and Bone's monop
olistic hold
The traffic. Won 417
on the
Airport - Hong Kong
You will have seen the letter from Carter to 8teel here of 2nd July,
It raises the issue of E.C.G.D. participation in a general package deal with Hong Kong.
Dealing first with the limited point of what E.C.G.D. might say in public, I should say that I would regard it as extremely doubtful whether .C.G.D. ought to give any prior assurance in advance in a general form that E.C.G.D. cover would be available for any part of the contract awarded to British firms. This would involve a degree of moral coa 1tment on your part which I think ought to be avoided. Experience shows that it is necessary before this kind of assurance can t given to have worked out the precise terms on which any credit would be provided and the necessary underwriting procedures which are associated with it. Given past difficulties with Hong Kong on both these subjects, I would think it would be unwise to go in for any advance blicity of the kind suggested. To say that E.C.G.D. would consider cover in appropriate terms in appropriate circumstances is of course something quite different, but I would dou't whether this would be what Hong Kong are asking for.
1
More generally I found it difficult to see in the three elements referred to in pegaph 8 of Carter's letter a "satisfactory package deal". If one looks at the three items carefully it appears to be a ck ge of three concessions to Hong Kong. I have always regarded a package deal as something which included concessions by both sides so that an effective and satisfactory compromise was reached. What I think we need therefore is something by way of a quid pro quo from Hong Kong. I had hoped that we might effectively be able to take a lear out of the French or German book here and make it clear that if we were to rticipate in any aid operation, then this would imply to Hong Kong the need to give us some assurance about the direction of the ultite contract 3. I still remain myself of the opinion that if Hong Kong want the assistance which they have requested, then it is up to them to find some up, ropriate quid pro que to justify it. For then to say that it is difficult for them to proceed on anything other than ar open tender basis may be right. It is however their problem, and they ought to be left to solve it.
*[(7.c.o^>
A copy of this letter goes to D.C. Smith (B/Trade), W.8. Carter
> Ricketts (0.0.1.).
Ricketts (O.D.M.), and Steel (Treasury).
Yours sincerely,
J. 0111, E84.,
(C.C. Lucas)
LAST
40
Fxport Credits Guarantee Depart
Farrington House,
59/67, Gresham Street,
B.C.2.
RECEIVED IN REGISTRY A51
- 7 JUL 1969
HKCK 21
121/11
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