TNAG-0863-FCO40-1073-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 165

local airline based in Hong Kong, is placed first to benefit. The proposals of the US negotiations were submitted and concurred in Ministerially in the Colonial Office before being concluded.

Malaysia/Singapore

-

We were not contented with the results of that negotiation for the British position overall. However, and especially bearing in mind all the advice we received on the aspect of political relations with the other Commonwealth countries concerned, or the political difficulties seen as debarring some possible lines of bargaining e.g. Malaysia/Singapore as cabotage, Brunei rights, divisive tactics, we had to face the fact that it was, warts and all, - the best deal available at the time. There seens still to be a belief in Hong Kong that, in that negotiation, the interests of CPA were sacrificed to those of BOAC. HMO should make it clear that is not the fact. To have sacri- ficed BOAC further would in no way have helped CPA. That was not how the HalayMalaysia and Singapore Governments, closely advised by their airline, regarded the negotiation. They set out to ligit CPA as an object in' itself, and in the oircumstances there was nothing to do that could be realistically reckoned to get CPA better treatment in the Bilateral at that time. Nor, by moving to accept what it was obliged to as regards CPA, did HMG get any better treatment than would otherwise have been forthcoming for BOAC. This was a problem faced and decided by Board of Trade and Commonwealth Office Ministers, before it was settled how the UK should act, once the situation confronting us becane olear in negotiations. Hong Kong's views were fully available to Ministers in reaching their decisions. The discussions were specially adjourned to enable all this to be considered in London, with Hong Kong's full views, before HIG reached decisions. Even if the UK, Hong Kong, or CPA had completely foreseen that Malaysia/Singapore were going to be so tough, this would not have altered the facts or the limitations in our ability to counter them.

CPA's prosent successful operations are, of course, also a reflection of EMG's success in negotiating rights for the airline. Negotiations must, however, be carried out realistically within the limitations of the particular circum- stances facing the UK.

Summary of UK response to Hong Kong Paper

31. It seems a matter for some surprise and regret that Hong Kong should feel it appropriate to record its opinion that the interests of Hong Kong have been disregarded by the UK in negotiating on air traffic rights particularly as the Hong Kong paper contains no satisfactory evidence to support this opinion. In negotiations the UK has regard to the interests of Hong Kong and CPA on the same basis as for any other British civil aviation interest, and the general guide for HMO, if there should be any conflict of priorities, is to seek the optimal result for British interests as a whole. ~HMG agrees that the amplest UK consultations with Hong Kong and CPA before anddduring

negotiations, are desirable. Such consultations already proceed atʼvarious points, but HMG is most willing to consider any practical proposals to improve the mechanics of consultation. The participation of Hong Kong advisers, Governmental and airline, in the British team for negotiations, and when convenient to Hong Kong, at briefing discussions is the object of existing practice, which the UX is anxious to maintain and develop to the full. At the same time any proposals must take into account the constitutional situation of Hong Kong and the international fact of Mid's responsi- bility and answerability abroad, and the consequent fact that Hong Kong representatives attend negotiations as advisers with the UK negotiators and not as representatives of a third independent nation. Due regard must also be paid to the fact that HMG

cannot accept and there is no reason to expect that the other side in.negotiations would accept any proposal involving an effort to divorce negotiations on areas in which Hong Kong has an irrest from the overall responsibilities and wider intereats which the UK must represent. Nor, in the same way, can the UK aocppt any proposals to limit bargaining involving traffio rights at Hong Kong to the likely benefits for CPA alone, with complete disregard of other interests of Hong Kong, of other UK territories overseas, and of the United Kingdom itself. At the end of the day degisions are necessarily ĦMO's, submitted, when needful, to Ministers.

AOPA BOT

A

6th October 1987

8.

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