TNAG-2850-FCO40-4103-Air-services-agreement-between-Hong-Kong-and-the-US-1993 — Page 41

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04/29/93

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A pass copy to Сарико Hey Budensees

Department of Transport

2 Marsham Street LONDON SW1P 3EB

29 April 1993

Dear Rod,

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British Embassy Washington

3100 Massachusetts Ave N.W. Washington D.C. 20008-3600

Telephone: (202)

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HONG KONG TELNOS 619 AND 633, FCO TELNO 351: HONG KONG/US AIR SERVICES

1.

The exchanges in T'sUR rest with Hong Kong's undertaking to revert before bilateral talks which begin on 5 May.

I shall not intervene in these exchanges unless you think that I should. Hong Kong's separation came up in passing in my conversation today with Paul Gretch (US DOT), the rest of which I report separately.

2.

Broadly, Gretch confirmed what you had reported him as saying in FCO telno 351. He considered that time was now pressing. We were almost too late to get a free standing separate agreement in place and running for a reasonable spell before 1997. He said that he had looked at other separation agreements that had been negotiated in respect of Hong Kong and had concluded that on passenger services the Hong Kong Government had sanctioned a fair amount of liberalisation for the US compared to that granted to other aviation partners. Gretch was also aware of what had been achieved in US/UK/HK talks in respect of nationality provisions and the overall text of the draft separation agreement. He had no wish to waste this.

3.

He again hinted that US carriers - he cited United might be ready to moderate their demands, especially for passenger services, in the context of an acceptable separation agreement. He was however convinced that he could not secure acceptance of a separation agreement which did not include something real, even if not particularly grand, on cargo fifths.

4.

He said that he had an appointment with Cathay Pacific's Washington lawyer on the Tuesday after the UK/US bilateral talks in London. This timing might make it difficult for Hong Kong to revert as promised. It will also make it difficult for the Americans to take matters