TNAG-0868-FCO40-1078-Air-services-between-China--Hong-Kong-and-the-UK-1979 — Page 236

8

C

CONFIDENTIAL

THIS IS A COPY THE ORIGINAL HAS BEEN CLOSED UNTIL

UNDER FOI

EXEMPTION NO 27.6) 4).4.(1)...

4. A compromise formula (see Annex B) was agreed last month

subject to the understanding that it would have to be put to

Ministers after the election.

Under this formula, HMG would

issue a modified form of the public statement originally requested.

which involves no more than reaffirming the principles laid down

in the 1972 Agreement on the Exchange of Ambassadors (when the UK acknowledged the Chinese Government's position that Taiwan

was an integral part of China

If Ministers

agree, the "statement" could be made in answer to a Parliamentary

Question.

5. Meanwhile arrangements have been made for a Department of

Trade negotiating team to hold talks on technical aspects of

the Agreement in Peking from 18 May.

If these are successful

a statement on the lines proposed will need to be made, timed

to coincide appropriately with formal signature of the Agreement.

MAED are submitting separately, for information, on the other

aspects of the proposed Agreement.

Argument

6. A significant number of other Western countries have Air

Services Agreements with China, and British Airways have strong

commercial and prestige interests in concluding one too. The

political formula agreed with the Chinese Government represents

a reasonable compromise.

We cannot absolutely rule out the

possibility that it could provoke the Taiwanese to retaliate

against Cathay Pacific Airways, but we judge this very unlikely.

CONFIDENTA.

/Officials