TNAG-0863-FCO40-1073-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 158

CONFIDENTIAL

5820

Kexorandum on Hong Kong Paper concerning Air Services Talks

involving Cathay Pacific

(References to paragraph numbers relate to the Hong Kong paper)

It was agreed with Commonwealth Office that in the light of the Commonwealth Office /Board of Trade discussions, the Board of Trade should prepare a memorandum on the above Hong Kong pepor.

Summary of Hong Kong Pater

2.

The Hong Kong paper states that the UK uses air traffic rights at Hong Kong as a negotiating asset and sought to show CPA's value to the UK and to Eong Kong. The MAirline's legitimate aims" were then stated, and proposals made to "safeguard the interests of CPA and Hong Kong in air services negotitions", including suggestions for "a properly defined status for the Hong Kong representative on UK negotiating teams". The raisons d'etre for the paper are basically that the Hong Kong Govern- ment does not, in effect, run UK negotiations in which Hong Kong has an interesti and the allegation that the interests of CPA have not been adequately looked after by the UK. A basic theme of the paper is that, in negotiations, traffic rights at Hong Kong should be reserved specifically to gain advantages for Hong Kong, whatever the wider responsibilities which the UK has to take into account in formulating an integrated bargaining position for UK (including colonial) interests as a whole. General Comments

3. The approach in the paper seems to stem from what may be some lack of appreciw tion of the hard faots of the circumstances facing the UK in recent air services negotiations, and on some other misconceptions, including what does not appear to be an accurate view of Hong Kong's actual constitutional situation as regarde soverignty. Thereby to follow through every point in dep with the Hong Kong paper would not pro- duce the clearest or most useful statement, and the following commentary deals with the general ximp sweep of Hong Kong's proposals and their presentation, rather than trying to pick up every single point where disagreement with the views in or emphasia of the Hong Kong paper could fairly be noted. Nevertheless some repetition of points is occasionally necessary because cognate aspects récour more than once in following the general sequence of the Hong Kong paper.

UK responsibility for Traffic Rights at Hong Kong

4.

Under the terms of the Chicago Convention, Hong Kong is UK territory and EIG is responsible for Hong Kong air traffio rights matters and answerable internationally for these responsibilities. This situation is, of course, identical to that of,some other countries, e.g. US responsibilities in relation to Puerto Rico, Guam and” Samoa and Francs in respect of Tahiti or Martinique. The UK itself has to discharge identical responsibilities for many other points as well as Hong Kong, e.r. Mammitius, Fiji, Bermuda, Bahamas, Antigua eto. The UK is thus concerned with Hong Kong as a responsibility for whichEIG alone is internationally answerable, and not just as a "negotiating asset", as described in the paper. (Para.1): its actions are also shaped by its responsibilities as sovereign power for the wellbeing of Hong Kong. 5. There is no recognised validity in international aviation for the principla advanced in Para.17 of the paper that the UK "controls Hong Kong's aviation rights in trust for Hong Kong as a seperate entity", with Hong Kong's interests thonu automatically over-riding and limiting MC's control and discharge of its interavion- ally established responsibilities. The rights are the responsibility of the UK and not of Hong Kong, and the Chicago Convention permits no alleviation of responsibility on the grounds that a Party is acting in the special interests of a colonial territory. Hong Kong's interests must therefore be weighed finally, not by the Hong Kong Colonial Goverment, but by 1910.

Constitutional Situation of Hong Kong

[Commonwealth Office are considering this aspect and will no doubt malio 2 contribution and examine the following preliminary comments.

6.

The wider question of Hong Kong's constitutional situation is relevant to the above and to the general tenor of the Hong Kong paper. Hong Kong is not a Autiom and

1.