TNAG-2851-FCO40-4104-Air-services-agreement-between-Hong-Kong-and-Japan-1993 — Page 27

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(b)

So far we have concluded ASA negotiations on this basis with 15 of our 20 separation partners. of the remaining five, Japan and the US are the most important and we have reached an advanced stage with the latter.

If

separated no

ASA with Japan is in place by 1 July 1997 (and time for that is already running short, given the normal procedures that need to be observed between negotiation of an ASA and its entry into force), no basis will exist on that date for the operation of air services between Japan and Hong Kong. Leaving aside the commercial uncertainty and practical inconvenience that may result, the Japanese will then be faced with the choice of negotiating and concluding as a matter of urgency:

(i) an ASA with the new 'Hong Kong Special Administrative Region (HKSAR) Government, which will need to obtain a specific authorization from the PRC for that purpose; such negotiations will necessarily take some time to conclude and will probably result in an ASA little different from existing Hong Kong ASAS, because the latter are designed as prototypes for any post 1997 ASAS that may be required with new partners;

(ii) an amendment

as

to

their air services arrangements with the Chinese to provide for Hong Kong/Japan services. Given the PRC's restrictive approach to air services, it is most unlikely that such arrangements will be commercially attractive to Japanese airlines as their existing arrangements for serving Hong Kong. Furthermore, the Joint Declaration requires all services to, from or through Hong Kong which do not operate to, from or through the mainland of China to be regulated by SAR ASAS (see sub para. (i) above). Services operated under PRC ASAS after 1997 would, therefore need to be routed via points in the mainland of China, which would be a substantial operating constraint.

Taiwan. The Joint Declaration permits Hong Kong ASAS to include services via Taiwan, and, although this is

sensitive a

matter for the PRC it has stated, in general terms, its wish to preserve the continuity of air links between Hong Kong and Taiwan. There is, therefore, a strong presumption

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/that