TNAG-0862-FCO40-1072-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 42

6. PRICE TELLS ME THAT HE MADE THE POINT TO HIS MINISTER THAT ANY CONCESSIONS TO ASEAN AIRLINE INTERESTS WOULD DAMAGE THE FINELY BALANCED ECONOMICS OF THE ICAP REGIME FOR CANTAS AND BA. PEACOCK DISMISSED THIS, ARGUING THAT QANTAS WAS ALREADY SUBSIDISED BY THE FEDERAL GOVERNMENT, AND IF HIGHER SUBSIDIES WERE NEEDED TO PRESERVE GOOD AUSTRALIAN/ASEAN RELATIONS, SO BE IT. MR PEACOCK WAS ALSO NOT PLEASED TO DISCOVER THAT AUSTRALIAN HIGH COMMISSION HERE HAD NOT BEEN KEPT INFORMED OF RECENT UK/ AUSTRALIAN DISCUSSIONS AND SO COULD NOT BRIEF HIM ON CURRENT STATE

OF PLAY.

7. MY AUSTRALIAN COLLEAGUE'S PESSIMISM IS PERHAPS ENCOURAGED BY

SOME STRANDS OF EVIDENCE THAT SINGAPORE IMPORTERS OF AUSTRALIAN

GOODS MAY BE MOVING TO A TRADE BOYCOTT. ONE CUSTOMER OF AN

AUSTRALIAN SUPPLIER OF PRINTING INK HAS SAID THAT HE IS CANCELLING

AN ORDER BECAUSE OF THE ICAP CONTROVERSY AND THE AUSTRALIAN

TRADE COMMISSIONER HAS REPORTED THAT SOME IMPORTERS OF AUSTRALIAN

FRUIT MAY BE THINKING OF NOT RENEWING THEIR CONTRACTS. PRICE

FEARS THAT AUSTRALIAN WHEAT CONTRACTS MAY ALSO COME UNDER REVIEW, ALTHOUGH SINGAPORE COULD NOT IMPORT ITS CEREAL NEEDS FROM OTHER SOURCES EXCEPT AT HIGHER COST. HE HAS REPORTED ALL THIS TO CANBERRA,

8. SENATOR SIM, THE CHAIRMAN OF THE AUSTRALIAN SENATE COMMITTEE ON EXTERNAL AFFAIRS, WAS ALSO IN SINGAPORE AT THE END OF LAST WEEK, AND RAJARATNAM SPOKE TO HIM IN CUSTOMARY TERMS ABOUT THIS DISPUTE. DURING THE CONVERSATION, MY AUSTRALIAN COLLEAGUE SOUGHT TO PERSUADE RAJARATNAM THAT THE DUOPOLY** OF WHICH HE COMPLAINED WAS NOT A PROTECTIONIST INNOVATION, AND THAT AUSTRALIA WAS NOT ALONE IN SEEKING TO INTRODUCE NEW LOW END-TO-END FARES: · LUFTHANSA AND KLM, NOT TO MENTION BRITISH AIRWAYS, HAD GONE ALONG WITH IT. IT WAS THE WAVE OF THE FUTURE. RAJARATNAM WOULD HAVE NONE OF THIS: THE AUSTRALIANS ALONE WERE RESPONSIBLE AND THEY HAD MADE MATTERS WORSE BY THEIR INSENSITIVE NEGOTIATING TACTICS.

9. MR KILLEN, AUSTRALIAN MINISTER OF DEFENCE, IS PASSING THROUGH HERE ON FEBRUARY 1/2 ON HIS WAY BACK TO AUSTRALIA FROM EUROPE. HE WILL BE SEEING LEE KUAN YEW, 'RAJARATNAM AND GON KENG SWEE. I AM DINING WITH HIM ON FEBRUARY 1. ON HIS WAY THROUGH HERE EARLIER THIS MONTH ON HIS WAY TO EUROPE, KILLEN ALSO EXPRESSED CONCERN AT IMPLICATIONS, OF WHICH HE WAS NOT HITHERTO FULLY AVARE OF THIS DISPUTE ON LARGER AUSTRALIAN INTERESTS IN THIS

PART OF THE WORLD. HE IS EXPECTING TO BE TACKLED ON IT BY SINGAPORE MINISTERS AND IT WOULD BE HELPFUL TO KNOW IF HE HAS