TNAG-0281-FCO40-317-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster-to-Hong-Ko-1970 — Page 197

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of an obsession, predictably raised the matter with the

Secretary of State on 30 June, 1970 at Luxembourg. This

was followed by a call on the Secretary of State by the

Netherlands Ambassador on 31 July who left an aide memoire

rehearsing the Dutch case. This is broadly that the

Netherlands have never refused the U.K.any request for

traffic rights, that after the U.K. they are the next

biggest trading partner of Hong Kong (this is incorrect:

West Germany, Japan and Taiwan have larger trade with

Hong Kong than have the Netherlands) and that among the

EEC countries with airlines operating to the Far East they

are the only one without rights at Hong Kong. (This also

is not in fact true. Sabena operate to Tokyo but do not

have rights at Hong Kong.

5. The Secretary of State said that he would take the

matter up with his colleagues. On 18 August the Chancellor

wrote to the President of the Board of Trade with copies

to the Defence Secretary and the Chancellor of the Exchequer.

(A copy of the letter is at Annex A). The President of the

Board of Trade has not yet replied.

6. The Governor may also raise the question of United

Arab Airlines (VAA) rights at Hong Kong. In the recent

air services negotiations with the UAR the traffic rights

that UAA at present enjoy at Hong Kong proved to be one of

the main obstacles to reaching an agreement. We denounced

the Air Services Agreement with the UAR last year on the

grounds of a large and persistent imbalance of earnings

between the airlines of the two sides, and it will expire

on 6 October. (This was done unfortunately without the

/Governor....

CONFIDENTIAL