TNAG-0858-FCO40-1068-Proposed-UK-China-bilateral-shipping-agreement-1979 — Page 109

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MRS 091/301/1

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Shipping Relations with China

Note of a meeting at SP Division, 1 Victoria Street on 12 March 197

Present: Mr M Morris

SP (Chairman)ectio

Mr D F Murray CMG FCO/HK&G

Mr MR Morland FCO/MAED

FCO/MAED

Mr D Wyatt

Mr JC S Priston CRE4/2

Mr A J Pryor SP3

Mr RJ Brown

SP3C

Mrs S M Gill

SP3C

RIZZIVED IN ROSA PYRO. 51 1 E MAR 1979

Taken

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with Chin

1. The meeting considered how to further shipping discussions/in the light of Mr Priston's visit with SoS (Ind).

Mr Priston's report

2.

Despite an advance text of a possible exchange of letters on cargo-sharing under the umbrella of the ECA, Mr Priston had difficulty in pinning down officials in the various Ministrięs concerned. The State Planning Commission and the Foreign Trade Ministry referred Mr Priston to the Ministry of Communications who in turn explained that they were not competent to deal with the matter. Eventually the Ministry of Communications agreed to study the text, although they suggested that the matter might be more appropriate to the Maritime Agreement, on which they were anxious to resume negotiations. Mr Priston told the Chinese that we were ready to resume these negotiations and that the Embassy would be in touch shortly.

Mr Priston added that the Chinese seemed favourably inclined towards the "mutual benefit" phrase but had ignored references in the draft exchange of letters to "an equitable share".

3. Mr Priston confirmed that trade with China was now taking off, and that orders received in the UK in the last 6 months of 1978 (£2bn) were more than treble the annual average; £100m goods were due for delivery this year. In the general context Mr Priston explained that the UK party had not pressed for finalisation of any contracts/letters of intent etc because of concern to ward off Chinese demands for a quid pro quo, principally a definite commitment on the UK's part to supply harriers.

The E.C.A.

4.

Mr Priston confirmed that copies of the ECA would soon be available for internal distribution and that a general reference to shipping was contained in Article 3 along with insurance and services. He explained that there was no formal provision for following up matters raised in the ECA, but the door had now been opened and it was up to interested parties to make their mark. He felt that we should continue hammering home the message about cargo sharing, and that the State Planning Commission - senior to both the other 2 Ministries involved presented the best target

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