TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 246

CONFIDENTIAL

Brief No 7

SECRETARY OF STATE FOR TRADE'S VISIT TO HONG KONG 26-30 JANUARY 1980

BRIEF NO 7: SHIPPING

Line to take (Defensive: not for press briefing)

1. We will continue to resist protectionist measures which can only raise

seaborne transportation costs with adverse effects for all concerned.

2 We are well aware of Hong Kong concerns in relation to the proposed

Maritime Agreement between UK and China and we will press for her inclusion

in any subsequent negotiations with the Chinese.

3

As a constitutionally dependent territory, Hong Kong is not entitled

to a separate registry although we would be prepared to look into any. particular difficulties to which registry under the British flag gives rise.

Background

4

Approximately 1.23 million grt is registered in Hong Kong (a British part of registry) making it the 30th largest fleet in the world. However,

Hong Kong companies own or manage an estimated 50 million dwt, registered mainly under the Liberian flag. They have used flags of convenience (FCC)

mainly, it is thought, because of greater manning flexibility and freedom from union constraints, although there is evidence of some recent repatria- tion to the Hong Kong registry, as a result of International Transport Workers Federation (ITF) pressures against FOC.

5 HMG has had representations, from Hong Kong shipowners among others, about the recent House of Lords Judgement that the blacking by the ITF of a

Hong Kong registered ship the "Nawala" at Redcar was lawful despite the

fact that there was no dispute between the owners NWL and the Chinese

crew. Ministers are considering these representations but no decisions

have yet been taken on whether UK industrial relations legislation should

be amended.

6

Hong Kong companies such as World Wide Shipping (Sir Y K Pao) the CY

Tung Group, and Jardine Matheson, have weathered the recession in shipping

more successfully than most, because of their policy of acquiring ships

against a long-term charter, albeit at moderato rates, by a third party. Currently World Wide Shipping, the largest independent shipping company

CONFIDENTIAL