CONFIDENTIAL
HKCK 175/2
A
Mr Cortazzi
PROPOSED UK/CHINA MARITIME AGREEMENT:
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THE HONG KONG INTEREST
1. You asked to see comments on Hong Kong telegram No 406
(your minute of 22 March).
2.
Between 1973 and 1976, China concluded maritime agreements with some 12 OECD countries. The agreements covered such matters
as access to ports, avoidance of flag discrimination, most favoured nation treatment for vessels and crews, protection for crew, and mutual exemption from tax. During 1976, our Embassy in Peking passed to the Chinese Government a suggested draft for a possible UK/China Maritime Agreement on the same lines. But the negotiations were broken off in January 1977 because of China's unwillingness to include Hong Kong within the scope of the agreement. 3. When the Secretary of State for Trade, Mr Dell, went to Peking last August, he told the Chinese authorities that we were anxious to resume the negotiations. Mr Dell was speaking to a brief prepared very much at the last minute and neither shown to this department nor cleared in advance with the Hong Kong Government (though the Political Adviser was able to outline Hong Kong's concern to Mr Dell). Following Mr Dell's visit, the DOT have continued to press us to maintain the momentum. During Mr Varley's visit to Peking last month, a member of his prty, Mr Priston of the DOT, showed the Chinese Ministry of Communications a draft text of a letter under the ECA which would provide for a more equitable sharing of the carriage of goods. In the course of the ensuing discussion, the Ministry of Communications apparently asked about the Maritime Agreement and were told by Mr Priston that we were ready to resume negotiations. The DOT now want us to send instructions to the Embassy to proceed.
4.
As a preliminary to preparing the brief for the Embassy, we asked Hong Kong to provide a statement of what they stood to lose
from a Maritime Agreement from which they were excluded, and the minimum safeguards they would require in that event. Hong Kong telegram No 406 is the reply to that request.
5.
As you will see, quite considerable Hong Kong interests are at stake. The technical difficulties which a metropolitán
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