Mr
Masetfeld
CONFIDENTIAL
CHINA
G
SHIPPING MATTERS
16
HKK 145/2
Reference
K
& A
1.
I attended a meeting at the Department of Trade on 14 February to discuss Peking telno 212 on the exchange of letters relating on cargo carrying under the Economic Co- operation Agreement and the possibilities of resuscitating the talks on the Shipping Agreement. Both points are connected with Mr Varley's visit.
2. On the first point, DOT are not happy with the reply. If that is all we are going to get it is not satisfactory. CRE4 are drafting a telegram for us
telegram for us to send which will say this and ask the Embassy to say that one of Mr Varley's party CC Priston in fact) will wish to discuss.
3.
On the Shipping Agreement, Shipping Policy are still claiming that they are being pressed by industry and that if cargo carrying becomes a reality an agreement will be essential. I made the points against as best I was able, strengthening them with references to the Governor's forthcoming visit. still want our view in black and white a detailed answer to Mr Pryor's letter of 7 August in fact. My agreed draft is at A.
DOT
4. In that context they want to know why Hong Kong does not object to a metropolitan territories only Economic Agreement. I said I thought it had no need of it in view of its relation- ship with China.
5. A line for Mr Varley to take on the Shipping Agreement is required urgently. Ad referendum I agreed that something on the lines of: "We are ready to open discussions whenever the Chinese are ready" might be acceptable. DOT said they would not expect to go straight into negotiations if the Chinese said yes. The first step would be a tour d'horizon during which the Hong Kong problem could be discussed. Roger Allen said that he thought the Chinese response would be to ask for our proposals.
Andrew Boull Arell
C C Hayward
Far Eastern Department K251
233 5528
CODE 18-77
15 February 1979
CC:
Economic Co-operation File
Mr Quantrill, HK & GD (K247) Mr Greig, MAED (G63/1)
N Williamson J 19/2 Nhing ide
I discussed with the Masefield, in the light of a he had received of a brief
copy D.O.T. for
one
by from the
of N Varley's parts (N Priston) on what
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