TNAG-0858-FCO40-1068-Proposed-UK-China-bilateral-shipping-agreement-1979 — Page 119

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mooth of interest to us because of the copy of the final version of the brief Kate for W Pristor. UK/AHINA SHIPPING Unlike the original draft, this tells A Priston that The should only refer to the Maritime Agreement of ushed".

471-2

W.Chantill

1. Miss Brown sent FED and HKGD copies of her minute of 15 February to you describing the most recent meeting with Mr Morris on this topic. I have not yet seen a record of the meeting, but we have had no difficulty in agreeing with DOT officials a brief for one of Mr Varley's team to enable him to take up with the Chinese our ideas on "cargo sharing". This brief (copy attached) makes clear that our first priority is to

can get out of the Chinese under the Economic Co-operation Agreement, using the opportunity of

Mr Varley's visit to exert the maximum possible leverage for our objectives. In the light of the amount of progress we are able to make in this way, it will then be possible to assess realistically the likely value of pressing ahead with the Maritime Agreement itself. Although this agreement would deal with a number of relatively technical items such as usually feature in Maritime Agreements, I understand that the DOT's principal interest and that of the British shipping industry, lies in the field of cargo sharing. DOT accept that if we do not make progress in the context of the Economic Co-operation Agreement we are unlikely to do better in the context of the Maritime Agreement, where we shall lack the leverage of Mr Varley's visit and where there are other complicating factors particularly affecting Hong Kong. However, the possibility of using this avenue obviously exists and it would be wrong to rule it out, prima facie at this stage.

2.

It follows, and DOT officials at desk level agree, as they have done previously, that there are good policy reasons why we should hold back definitive FCO comments on the way ahead on cargo sharing until we have heard the results of the negoliations with the Chinese in the context of the Economic Co-operation Agreement which are due to take place next week. It is this reason rather than lack of staff or inclination which has led FCO departments, in agreement with officials in the DOT, to refrain from sending the negative reply to the DOT's letter of Last August which has been in draft for some time.

3.

I gather that the principal problem at the meeting on 14 February was that Mr Morris had not seen

a copy of Mr Samuel's letter to Mr Pryor and therefore was under the impression that no reply to the DOT's letter of last August had yet been sent. As explained above, Mr Samuel's letter was in fact on lines that had been agreed with Shipping Policy officials. The DOT have suggested that it might be tidy if Miss Brown were to send Mr Morris a brief Letter. I attach a draft.

20 February 1979

cc: Mr Quantrill, HKGD

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J. I have fold

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J T Masefield

Far Eastern Dept K258 233 5963

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