TNAG-0780-FCO40-984-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 221

CONFIDENTIAL

Miss Brown

cc: Mr Cortazzi

HEGD

MAED

MHD

SEAD

WED

SWPD

NAD

UK/AUSTRALIA AIR SERVICES

1.

B9%

N Thompson

רורית

Akk1841

REC...

IND

To

No as

Seah 410

When Sir Donald Tebbit was in the Office today I showed him Mr Morland's submission of 7 July and the accompanying drafts, i.e. the draft submission to Ministers, the detailed annex and the draft reply to the Australian Government.

HOS

20. 51

RY

#leen

2. Sir D Tebbit took the point that we will not be able to give agreement in principle to the Australian proposals util we have assessed all the factors, including the political problems arising from the likely reactions of mid-point countries; and that we must preserve an ability to retreat if the reaction to these countries is tough and concerted. However, he made his own point that the concept of cheap fares will no doubt be as popular in this country as it is in Australia, even though the greater benefit is likely to accrue to the Australian end. Added to this he considers that we would be best placed to an a decision of principle if we ourselves consulted mid-point countries alongside the Australians, because we would have acquired first-hand information on which to balance the political factors. Moreover, in the context of UK/Australian relations, this would be a somewhat better stance than the one in the existing draft UK reply. He suggested that it should be possible to formulate some words which would cover this point, drawing the Australians along with us, but still giving us an escape roube if we finally concluded that the Australian proposals wore disadvantageous to the UK.

3. Not an easy task, but if we accept Sir D Tebbit's argument that we should prevent the Australians feeling that they has been rebuffed, it might be possible to amend the second and third sentences of paragraph 3 of the draft reply to read as follows:

نا

We would welcome an opportunity/join with the Australiens

We could then consider in consulting these countries.

the proposals further with the Australian Authorities in the light of these consultations.

l. I imagine this would be acceptable to ir Rogers, but gen may take the view that my formulation constitutes too much of a commitment in principle, and that joint discussions with mid-point countries might still give the latter the impression that we are

There is some force in this, and we would ganging-up on them.

CONFIDENTIAL