TNAG-0864-FCO40-1074-Involvement-of-Hong-Kong-in-air-services-agreements-1980 — Page 100

CONFIDENTIAL

D) THE MALAYSIANS INSISTED STRONGLY ON THE RETENTION OF THEIR EXISTING FIFTH FREEDOM RIGHTS BEYOND HONG KONG TO TOKYO AS WELL A

TO TAIPEI. THEY TALKED IN GENERAL TERMS OF A WILLINGNESS TO RESTRICT

THE FIFTH FREEDOM TRAFFIC TO TOKYO TO SOME PERCENTAGE OF TOTAL MAS

TRAFFIC OUT OF HONG KONG, BUT AS FAR AS WE COULD JUDGE, FROM

AN INCONCLUSIVE DISCUSSION THE EFFECT WOULD BE TO MAINTAIN THEIR

PRESENT POSITION. NO REAL PROGRESS COULD BE MADE ON THIS ISSUE. E) WHEN THE MALAYSIANS COMPLAINED ABOUT IMBALANCE OF RIGHTS ON THE

EAST MALAYSIAN ROUTES WE OFFERED TO REDUCE THE RIGHTS ENJOYED BY

CPA TO THEIR ACTUAL PRESENT SERVICES, IE CPA WOULD ONLY HAVE THE

RIGHT TO OPERATE TWO 7078 DETWEEN HONG KONG AND KOTA KINABALU OR KUCHING, WITHOUT ANY FIFTH FREEDOM RIGHTS BEYOND TO SINGAPORE. F) THE MALAYSIANS ASKED FOR FIFTH FREEDOM RIGHTS ON THE TRUNK ROUTE AT DUBAI OR ANY OTHER POINT IN UAE. WE REPLIED FIRMLY THAT, BECAUSE OF OUR REENT PROBLEMS IN AIR SERVICES WITH THE GULF, AND

THE 'STRONG DESIRE OF THE UAE AUTHORITIES THAT NO FURTHER FIFTH

FREEDOMS SHOULD BE GRANTED IN RELATION TO THEIR TERRITORY, WE

COULD NOT AGREE.

IN ADDITION STEELE MADE IT CLEAR IN PRIVATE CONVERSATION WITH NOOR

THAT ANY FINAL PACKAGE WHICH MIGHT BE AGREED WOULD ALSO BE

CONDITIONAL ON OUR SIDE ON A MALAYSIAN UNDERTAKING TO ALLOW CONCORDE

SERVICES TO SINGAPORE THROUGH MALAYSIAN AIR SPACE TO CONTINUE.

DESPITE SUBSTANTIAL DIFFERENCES OF OPINION, DISCUSSION THROUGHOUT

REMAINED AMICABLE. IT WAS EVENTUALLY AGREED THAT THE PRESENT ROUND

OF TALKS SHOULD BE CONCLUDED, AND THAT AFTER BOTH SIDES HAD HAD AN

OPPORTUNITY TO CONSULT THEIR GOVERNMENTS THERE SHOULD BE A FURTHER

ROUND AT THE END OF JULY OR AT THE BEGINNING OF AUGUST, WHEN ROBERTS (SUCCESSOR TO ROGERS) WOULD COME OUT TO KUALA LUMPUR, WE SEE SOME

ADVANTAGE IN HOLDING THESE TALKS AFTER THE SIX MONTH TRIAL PERIOD

FOR CONCORDE HAS EXPIRED.

WE EXPECT TO HAVE A FINAL MEETING TOMORROW TO AGREE TO THE TEXT OF

A SHORT MINUTE RECORDING THE MAIN POINTS RAISED BY BOTH SIDES

IN THE DISCUSSION.

WE THINK IT IMPORTANT THAT THE FURTHER CONCESSIONS WHICH WE HAVE PUT FORWARD (SUBJECT TO REFERENCE TO MINISTERS) SHOULD NOT BE REGARDED BY THE MALAYSIANS AS THE STARTING POINT FOR THE NEXT ROUND

OF DISCUSSIONS, WE WOULD THEREFORE BE GLAD IF YOU WOULD EMPHASISE

2

CONFIDENTIAL

las