TNAG-0862-FCO40-1072-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 41

FMC OF PROTECTIONISNE WASCH, BE DEVELOPED, WOULD SHUT OUT

IF AIRLINES OF ASEAN AND OTHER DEVELOPING COUNTRIES FROM FREE COMPETITION FOR INTERNATIONAL CIVIL AVIATION TRAFFIC. HE HANDED OVER A LETTER TO MR PEACOCK (OF WHICH THERE WAS ONLY ONE COPY AND MY AUSTRALIAN COLLEAGUE WAS ABLE ONLY TO OBTAIN A FLEETING GLIMPSE OF IT) WHICH REHEARSED SINGAPORE ARGUMENTS IN SOMEWHAT RHETORICAL TERMS. HE SAID THAT IF AUSTRALIA FELT UNABLE TO POSTPONE THE INTRODUCTION OF ICAP FARES ON 1 FEBRUARY, HE WOULD FEEL COMPELLED TO PUBLISH IT BEFORE THEN IN ORDER TO SHOW THAT SINGAPORE MEANT BUSINESS IN HER PROTESTS AGAINST THE NEW POLICY, AND AGAINST THE WAY THE AUSTRALIANS HAD SOUGHT TO DIVIDE ASEAN AND ISOLATE SINGAPORE: HE TOOK THE STRONGEST EXCEPTION TO THE AUSTRALIAN NEGOTIATING TACTICS. AFTER SOME DISCUSSION, HE AGREED TO DEFER PUBLICATION UNTIL 31 JANUARY. HE REITERATED HIS ARGUMENT THAT, IF THE INTRODUCTION OF ICAP COULD NOT BE POSTPONED, ASEAN AIRLINES SHOULD BE PERMITTED TO COMPETE FOR THE TRAFFIC ON NO LESS FAVOURABLE TERMS THAN HERETOFORE PENDING A CONSIDERED

NEGOTIATION OF THE ISSUES.

4.

MR PEACOCK SAID THAT HE DID NOT THINK IT POSSIBLE TO DELAY INTRODUCTION OF THE ICAP SCHEME, HE WAS NOT CONVERSANT WITH THE FINE DETAIL, BUT HE WAS CONCERNED AT THE RISK OF DAMAGE TO ASEAN/AUSTRALIAN RELATIONS. HE HAD NOT BEEN FULLY DRIEFED ON THESE IMPLICATIONS OF THE ICAP SCHEME. ON HIS RETURN TO AUSTRALIA HE WOULD MAKE A SERIOUS ATTEMPT TO PERSUADE HIS COLLEAGUES TO LOOK AT THE ISSUE AGAIN AND SEEK SOME COMPROMISE WHICH WOULD GO SIGNIFICANTLY ALONG THE ROAD TO MEET ASEAN COMPLAINTS. HE THOUGHT THIS MIGHT WELL BE FOUND IN A REDUCTION OF STOPOVER FARES, BUT WAS VAGUE ABOUT CAPACITIES,

5. MY AUSTRALIAN COLLEAGUE, WHILE COMFORTED BY MR PEACOCK'S CANDOUR, FEARS THAT MATTERS MAY NOW HAVE GONE SO FAR THAT A TECHNICAL SETTLEMENT, 1.E. BY ADJUSTMENT OF STOPOVER FARES, MAY NOT SUFFICE. HE FEARS THAT SINGAPORE MAY HAVE CONVINCED HER ASEAN PARTNERS THAT THEIR CIVIL AVIATION INTERESTS ARE THREATENED IN THE LONGER TERM BY THIS NEW POLICY, AND THAT THIS OUTWEIGHS ANY SHORT-TERM GAINS IT MIGHT OFFER THEM AT THE EXPENSE OF SIA. INDEED, GIVEN THEIR ENVY OF SIA - ON WHICH THE AUSTRALIANS HAVE SOUGHT TO PLAY - THIS IS THE BEST CARD SINGAPORE COULD PLAY. I DO NOT BELIEVE THAT SINGAPORE CAN SERIOUSLY HOPE TO ESTABLISH A FREE-TRADE REGIME FOR CIVIL AVIATION AND SECURE FOR ASEAN AIR- LINES A SHARE IN THE THROUGH TRAFFIC, WHIGH THEY HAVE NEVER HAD. I STILL FEEL THAT THEY WILL SETTLE FOR A STOPOVER REGIME WHICH DOES NOT DISCRIMINATE PROHIBITIVELY AGAINST THEM.

PRICE TELLS ME THAT HE MADE THE POINT TO HIS MINISTER THAT