TNAG-0858-FCO40-1068-Proposed-UK-China-bilateral-shipping-agreement-1979 — Page 149

* **བད་་ཀ་་

CONFIDENTIAL

QUOTE THEY SHALL STRIVE TO KEEP THEIR MUTUAL ECONOMIC INTERESTS WELL

BALANCED UNQUOTE IN ARTICLE 1. OUR EXPECTION IS THAT THE BALANCE OF

TRADE UP TO 1985 WOULD BE HEAVILY IN OUR FAVOUR: WE DO NOT SEE

THE CHINESE COULD ACHIEVE EXPORTS TO US IN THAT PERIOD OF ANYTHING

APPROACHING POUNDS STERLING 5BN. YOU SHOULD HOWEVER MAKE IT CLEAR TO

THEM THAT WE DO NOT REGARD THIS ARTICLE AS COMMITTING US TO ACCEPT

SUBSTANTIALLY INCREASED QUANTITIES OF GOODS WHICH ARE SUBJECT TO

QUOTAS. DISCUSSIONS ON THIS SUBJECT ARE PROCEEDING WITH THE EEC

WHICH IS NOW THE COMPETENT AUTHORITY.

WE INCLUDED IN ARTICLE 5 OF OUR DRAFT AN OFFER TO GIVE THE CHINESE

ADVICE ON EXPORTING WHICH WAS INTENDED TO IMPLY MARKETING TO THE WHOLE WORLD, NOT JUST TO THE UK. THIS OFFER IS STILL OPEN,

D. THE CHAPEAU OF ARTICLE 3 OF THE CHINESE DRAFT CONTAINS THE FOLLOWING PHRASE WHICH DOES NOT APPEAR IN THE FRENCH AGREEMENT:. QUOTE INVOLVING TECHNOLOGY TRANSFERS, MANUFACTURING EQUIPMENT AND PRODUCTS UNQUOTE. WE ASSUME THAT THIS ARTICLE IS MAINLY CONCERNED

WITH UK EXPORTS TO CHINA BUT IF THE CHINESE INDICATE THAT THEY

REGARD IT AS HAVING IMPLICATIONS FOR THE IMPORT INTO THE UK OF GOODS UNDER QUOTA THE COMMENT IN (C) ABOVE APPLIES.

E. WE ARE PREPARED TO ACCEPT THE LIST OF SECTORS IN ARTICLE 3 BUT

THERE ARE SOME NOTABLE OMISSIONS FROM THE LISTS IN OUR DRAFT AND IN

THE FRENCH AGREEMENT WHICH WE WOULD LIKE ADDED. THESE ARE FOOD

PROCESSING AND PACKAGING, ELECTRONICS, TELECOMMUNICATIONS, CONSTRUCTION AND TRANSPORT INFRASTRUCTURE (TO TAKE ACCOUNT OF THE ABSENCE OF ANY REFERENCE TO PORTS AND AIRPORTS ON WHICH WE ARE

ANXIOUS TO MAKE PROGRESS). WE WOULD ALSO LIKE TO ADD MEDICAL EQUIP-

MENT AND PHARMACEUTICALS. WHAT DO THE CHINESE THINK IS COVERED BY THE TERM QUOTE SERVICES UNQUOTE? WE ASSUME IT WOULD COVER SUCH ACTIVITIES AS CONSULTANCIES AND INSURANCE.

F. THE LAST PARAGRAPH OF ARTICLE 3 (WHICH WE ASSUME SHOULD BE HEADED ARTICLE 4) DEALS WITH QUOTE BANKING FACILITIES UNQUOTE. WE CONSIDER THAT THE TEXT OF THE FRENCH AGREEMENT QUOTE DES FACILITES FINANCIERES AUSSI FAVOURABLE QUE POSSIBLE UNQUOTE IS A BETTER FORMULATION AND THAT THE ENGLISH TEXT SHOULD READ QUOTE FINANCIAL ARRANGEMENTS ON AS FAVOURABLE TERMS AS POSSIBLE UNQUOTE. THIS ARTICLE

WOULD THEN READ:

2

1. QUITE THE

CONFIDENTIAL