CONFIDENTIAL
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113537
MDLIAN 7957
CONFIDENTIAL
FM HONG KONG
TO PRIORITY FCO
TELNO 1254
OF 281122Z JULY 1993
STRY
Taken
INFO PRIORITY DEPARTMELLI OF TRANSPORT MANILA
DOT (FOR IAD)
INIR
?pa
OUR TELNO 1210: HONG KONG/PHILIPPINES AIR SERVICES AGREEMENT.
SUMMARY
NO PROGRESS MADE. PHILIPPINES SIDE NOT AUTHORISED EVEN TO DISCUSS ASA SEPARATION UNLESS MAJOR COMMERCIAL CONCESSIONS WERE MADE TO PAL AT THE OUTSET. WE NATURALLY REFUSED, AND TALKS WERE ADJOURNED. BUT, INFORMALLY, PHILIPPINE DELEGATION MEMBERS PROMISED PROGRESS AT NEXT ROUND.
DETAIL
2. A 12-STRONG PHILIPPINE DELEGATION CAME TO HONG KONG NOT TO NEGOTIATE BUT TO DELIVER AN ULTIMATUM AT THE OUTSET OF THE TALKS: EITHER WE GRANTED 5TH FREEDOM TRAFFIC RIGHTS FOR PAL TO OPERATE BEYOND HONG KONG TO EUROPE, CHINA AND THE USA OR THERE WOULD BE NO DISCUSSION OF THE ASA. WE SAID THAT WE COULD SEE NO JUSTIFICATION FOR THE GRANT OF SUCH RIGHTS. WE POINTED OUT THAT THE ASA ROUTE SCHEDULE DID PROVIDE IN PRINCIPLE FOR INTERMEDIATE AND BEYOND FIFTHS (EXCEPT TO POINTS IN CHINA), AND IF SO DECIDED BY BOTH SIDES AT ANY TIME IN THE FUTURE THEY COULD BE EXERCISED BY CARRIERS OF BOTH SIDES. WHAT WAS MORE IMPORTANT WAS TO ENSURE THAT THE 3RD AND 4TH FREEDOM SERVICES BETWEEN HONG KONG AND THE PHILIPPINES COULD BE PRESERVED BEYOND 1997. THE HONG KONG/PHILIPPINES ASA WAS THE ONLY WAY TO DO THIS.
3. IN THE RESTRICTED SESSION THAT FOLLOWED, HIDALGO, THE PHILIPPINE DELEGATION LEADER, SAID THAT ALTHOUGH THE PHILIPPINE GOVERNMENT TOOK OUR POINTS, PAL HAD SUCCEEDED IN ELICITING FROM FOREIGN SECRETARY ROMULO (WITHOUT, APPARENTLY, THE PRIOR KNOWLEDGE OF TOURISM SECRETARY CARLOS) AN ASSURANCE THAT, UNLESS THE RIGHTS THEY SOUGHT WERE FIRST CONCEDED, THERE WAS NOT EVEN TO BE A CURSORY RUN THROUGH THE ASA OR THE OTHER SEPARATION-RELATED DOCUMENTATION. THE PHILIPPINE DELEGATION THEREFORE HAD NO AUTHORITY TO TALK UNLESS WE MADE THE 5TH FREEDOM CONCESSIONS THEY REQUESTED.
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