TNAG-0964-FCO40-1183-Air-services-between-the-UK-and-Hong-Kong-1980 — Page 56

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reference to Hong Kong and its free trade policy, at the same time. stating that Britain's trading policy was now one of the most open in the world, emphasising the view that subsidising and protecting industry did not save jobs but "perpetuates inefficiencies and, in the process, reduces standards of living".

"It's all reciprocal," Mr. Nott said during his visit in January.

The Federation was, therefore, most disappointed to learn of the recent decision by the U.K. Civil Aviation Authority to reject an application by Cathay Pacific Airways, the Hong Kong-based airline, for the London route; especially at a time when Hong Kong has accepted a Fritish request to improve the balance of trade by purchasing more U.K. products, and when the Hong Kong Government and local organisations, including our own, has been encouraging this at all levels. The Federation deplores this decision which steps far away from reciprocity by introducing a second U.K.-based airline on the Hong Kong/London route when the reciprocity is accorded to other countries in the region. This, in no small way, illustrates a regrettable example in the eyes of Hong Kong's trading partners and is inconsistent with the principle of reciprocity which the U.K. Civil Aviation Authority itself demands. When viewed in the context of the fact that the Hong Kong-based airline will have purchased over £70 million worth of U.. equipment by the end of the year, and their commitments will call for annual purchases of U.K. equipment in the order of £10 million per annum, this decision will inevitably damage the efforts that have gone into encouraging

Hong Kong to purchase additional U.K. equipment.

The Federation feels obliged to protest and seeks to verify the assurances of Mr. Nott which, two months after his visit, ring

hollow.

We can only regard this decision as shocking and it bodes ill for Hong Kong when, in the eyes of our other major trading partners, Hong Kong's maternal government has chosen to treat its ward with

The such scant regard to the principles of fair and reciprocity. manufacturing sector must record its protest against such shabby treatment which we consider to be damaging to the future international

trading interests of Hong Kong.

END