TNAG-0337-FCO40-373-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster--Sir-Geoff-1972 — Page 64

CONFIDENTIAL

VISIT OF THE CHANCELLOR OF THE DUCHY OF LANCASTER TO HONG KONG

September 1972

TRAFFIC RIGHTS AT HONG KONG FOR SCANDINAVIAN AIR SERVICES (SAS)

1. The Scandinavians have recently revived their request for

traffic rights for SAS at Hong Kong.

2. The Governor has urged us to accept the request for the

sake of Hong Kong's commercial interests. The Scandinavian

countries are important trading partners of Hong Kong: they

have made much of their lack of traffic rights in Hong Kong

in recent trade negotiations with the Colony and against the

background of a decline in the rate of growth of Hong Kong's

exports the Hong Kong Government are particularly anxious to

foster the Scandinavian market. Representations in the same

sense were made by unofficial members of the Legislative and

Executive Councils to the Secretary of State when he visited

Hong Kong last February,

3. The Secretary of State put Hong Kong's case to Mr John

Davies at the end of May. Mr Davies replied regretting that

he was unable to give away rights at Hong Kong in the absence

of any benefits the Scandinavians could offer us in exchange.

He felt that such a concession would weaken the bargaining

position of the UK Government in negotiations over traffic

rights generally.

4.

Hong Kong argue that we granted KLM traffic rights at

Kai Tak to further UK interests. We should now, they say,

CONF IDENT IAL

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