TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 171

CODE 18-77

CONFIDENTIAL

Reference..

on Air Sences file

HAK

18411

* REAR LO

夾

Mr Gray

Plan 19157

W

K 196.

...A

BRIEFING FOR SIR E YOUDE

1. Sir E Youde is scheduled to call on the Department of Trade on Friday, 5 March, and will be briefed on air services by Mr Roberts. Given the fact that DOT lead on this subject and that Mr Roberts will discuss this subject in whatever detail is nece- ssary as it affects Hong Kong, I presume, that you will wish to keep to general issues rather than become embroiled in specifics.

2. Hong Kong is an important business centre and is extremely popular as an air travel destination. Access to Hong Kong is in great demand by air carriers. This is of course a welcome position but in order to protect the interests of British owned airlines, traffic rights for foreign carriers are granted only on a cautiously negotiated basis, which confere similar, and preferably equal, benefits to our airlines. The Department of Trade are responsible for conducting such negotiations, which are conducted on a bilatera basis, though on some of the busier routes this can involve a multiplicity of airlines.

3.

MAED's position in this is to act as a point of contact between DOT and FCO Departments, and endeavour to make each aware of the others views. It is HMG's policy that Air Services should be con- ducted separate from other bilateral issues: this principle is understood, and implemented by many countries. But some (particularly those of the third world) politicise air service disputes.

Current Problems

Air Service negotiations due to arise in the foreseeable future which are likely to be difficult and which affect Hong Kong are:

4.

(i)

China. The next round of talks will take place later this month. The Chinese are traditionally difficult to deal with, and tend to take an unreasonably one-sided view of reciprocal benefits. This becomes particularly difficult in view of Hong Kong's special position with regard to China, but a card in our favour is that the Chinese greatly value their schedules to Hong Kong, which, I have heard said, are among the few upon which CAAC make a profit;

(ii) Malaysia. Like many other business issues between the

UK and Malaysia at the present time, Air Services is highly contentious. The Malaysians are primarily concerned

CONFIDENTIAL

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