TNAG-0863-FCO40-1073-Involvement-of-Hong-Kong-in-air-services-agreements-1979 — Page 88

CONFIDENTIAL

flying over its territorial sea.

There was an argument

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for serving notice of termination of the Air Services Agreement and it is possible that such a response might have led to an earlier solution. However it was sure rightly decided that the question should be played long in the interests of widér Anglo-Malaysian relations and both sides played things quietly in low key.

13. The British Government sought to remedy Malaysian complaints about general neglect. At the Prime Minister's suggestion, HRH The Duke of Kent paid an early visit in March, and he was followed shortly afterwards by Lord Goronwy-Roberts. A visit by the Secretary of State for Trade, Mr Dell, was planned for July but the Malaysians asked for postponement on account of their general elections. Furthermore, the British Government decided not to run down the Technical Assistance programme, as earlier planned. These measures quickly improved the atmosphere and the Malaysians admitted by the middle of 1978 that they no longer had any cause for general complaint. However, all this was insufficient to move them over Concorde itself.

14. In the course of exchanges both sides agreed that the Concorde and traffic rights issues were separate subjects, and that there could be no overt linkage between the two because of the precedent set if it appeared that the British Government had paid a price for passage of Concorde. Malaysian Ministers undoubtedly hoped, however, that a solution would be found in concurrent negotiations. They made increasingly plain their wish to expand MAS routes and

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