811.79693/9–746: Telegram

The Ambassador in China ( Stuart ) to the Secretary of State

1436. Powell to Norton TRC. Supplementing information contained Embtel 1404, August 30, re Civil Aviation Agreement, further [Page 1235] negotiations with Minister of Communications23 and staff have raised following points:

1.
Chinese Govt wants agreement to run for stipulated term of years rather than indefinitely and to provide for cancellation notice of only 6 months. Have advised we would not agree 6 months’ notice because it is too short in view of expense and preparation our carriers will be put to in effecting operation of this service. Twelve months notice of termination with 3 or 4 years stipulated term of agreement would be innocuous, and Chinese Govt strongly feels it will be in better position in handling requests of other powers for aviation rights in China. I recommend its acceptance.
2.
Minister of Communications was desirous of informally linking Air Transport Agreement with agreement to extend to China loan for improvement the airfields.24 Have advised him that if China wished to apply for such a loan it would receive due consideration by our Government under its policies relating to such matters, but we would not link such loan agreement to this Air Transport Agreement. Believe we will carry the point.
3.
Chinese Govt has reiterated its desire to reduce number of traffic points in China and allow only one traffic point on each of the three American routes. Have advised that while there may be some compromise on the former, I would not recommend favorable consideration of the latter. Frequency limitations were then suggested but I took the position they were equally unacceptable. I recommend we settle for Shanghai, Tientsin, Canton and Mukden with proviso that we will also have such other points as may be agreed upon from time to time. This proviso would enable us to get approval for additional traffic points in future without formally amending agreement. Peiping should be authorized temporarily in a letter so as to allow immediate operations by Peiping-Tientsin area, since landing facilities at Tientsin are now inadequate. Chinese negotiators have agreed to recommend acceptance this proviso. They have also agreed to authorize temporary landing rights at Peiping in a letter. It is going to be most difficult, however, to get Mukden as a traffic point at this time because of unsettled political situation in that area and Russian pressure. Negotiators feel it might be possible to authorize it in future. However, I recommend we insist on it since it is now possible to fly to Mukden. Do not think we should hold out for Dairen and Harbin in view of fact that control of those points would make it impossible to fly there even if they were included in agreement. In view of fact that Nanking is only 1 hour from Shanghai it does [Page 1236] not seem worthwhile to risk agreement on this point, or on the inland point of Hankow, particularly since we are about to succeed in obtaining concise, clear and clean-cut agreement instead of a Bermuda ambiguity. Have made every effort to steer a course around the Bermuda provisions which have been raised during negotiations.
4.
Chinese negotiations now insist upon deletion of paragraph of annex providing that in servicing routes two and three US carriers may at their option serve Hong Kong. Previously they objected to this as authorizing shuttle service and were assured that it would not. It is now apparent that their objection goes deeper and is related to British sovereignty at Hong Kong. They feel their position on this political issue would be weakened if this agreement should expressly recognize this traffic to and from Hong Kong, thus classifying it as international traffic and not cabotage. I explained that this agreement plus our United Kingdom agreement would authorize Fifth Freedom traffic between Hong Kong and traffic points in China without it being expressly authorized in Chinese agreement so long as Hong Kong remains British territory. They understand this but simply do not want the agreement to expressly so provide. I recommend deletion of this troublesome paragraph from the agreement and covering it in the proposed letter hereinafter set forth.
5.
As negotiations now stand we have reached informal agreement subject to approval of Govts as follows:
(a)
Body of agreement to be standard form of agreement for provisional air routes contained in final act of Chicago Conference with following amendment:
(1)
Amendment 7 to read: Each contracting party reserves the right to withhold or revoke a certificate or permit to an airline of another state in any case where it is not satisfied that substantial ownership and effective control are vested in nationals of such other party to this agreement, or in case of failure of an airline to comply with the laws of the state over which it operated, as described in article VI hereof, or to perform its obligations under this agreement.
(2)
Include the following as article IX: Except as otherwise provided in this agreement or in its annex, any dispute between the contracting parties relating to the interpretation or application of this agreement or its annex which cannot be settled through consultation shall be referred for an advisory report to the Interim Council of the Provisional International Civil Aviation Organization (in accordance with the provisions of article III, section 6 (8) of the Interim Agreement on International Civil Aviation signed at Chicago on December 7, 194425 or its successor.
(3)
Add the following to article X: In the event either of the contracting parties considers it desirable to modify the routes or conditions set forth in the attached annex, it may request consultation between the competent aeronautical authorities of both contracting [Page 1237] parties, such consultation to begin within a period of 60 days from the date of the request. When these authorities mutually agree on new or revised conditions affecting the annex, their recommendations on the matter will come into effect after they have been confirmed by an exchange of diplomatic notes.
(4)
Include the following as article XI: This agreement shall continue in force for a period of 4 years or until such time as it may be amended, or superseded by a general multilateral air convention. Upon the expiration of this agreement its renewal for additional periods of time to be agreed upon may be effected by an exchange of diplomatic notes. It is understood and agreed, however, that this agreement may be terminated by either party upon giving 1 year’s notice to the other contracting party. Such notice may be given at any time after a period of 2 months to allow for consultation between the contracting party giving notice and the contracting parties served by the routes.
(5)
Incorporate the following route annex: Airlines of the US authorized under the present agreement are accorded rights of transit and non-traffic stop in Chinese territory, as well as the right to pick up and discharge international traffic in passengers, cargo and mail at Shanghai, Tientsin and Canton (Mukden not yet agreed to) as well as at such additional points as may be agreed upon from time to time on the following routes via intermediate points, in both directions:
(1)
The US over a Pacific route to (Mukden not yet agreed to) Tientsin and Shanghai and thence to the Philippine Islands and beyond, as well as connecting at Shanghai with route No. 3 described below.
(2)
The US over a Pacific route to Shanghai and Canton and beyond.
(3)
The US over an Atlantic route via intermediate points in Europe, Africa, the Near East, India, Burma and Indo-China to Canton and Shanghai and beyond.
On each of the above routes the airline authorized to operate such route may operate non-stop flights between any of the points on such route omitting stops at one or more of the other points on such route.
(b)
Airlines of China authorized under the present agreement are accorded rights of transit and non-traffic stop in the territory of the US, as well as the right to pick up and discharge international traffic in passengers, cargo and mail (traffic points not yet formally requested) on the following routes, via intermediate points in both directions.
(1)
China over a Pacific route via the intermediate points of (northern Pacific route but not yet specifically defined).
(2)
China over a Pacific route via the intermediate points of Guam, Wake, and Honolulu to San Francisco.
(3)
China over an Atlantic route via intermediate points in Indo-China, Burma, India, Near East, Africa and Europe to New York.
On each of the above routes the airline authorized to operate such route may operate non-stop flights between any of the points on such route omitting stops at one or more of the other points on such route. (This will constitute entire route annex.)
(c)
Have following letter delivered on signing of agreement: [Page 1238]

Excellency: I have the honor to refer to the Air Transport Agreement between the Governments of the United States and China which has been signed today. The Government of China, appreciating the viewpoint of the Government of the United States with respect to the necessity for the use of airport facilities at Peiping in order to presently serve the traffic point of Tientsin designated in the aforesaid agreement, assures the Government of the United States that until such time as the airport facilities at Tientsin are enlarged and improved to the extent necessary to accommodate aircraft flying the international route serving Tientsin, there will be no objection on the part of the Government of China to the aircraft serving this route landing for international traffic purposes at Peiping. It is understood and agreed, however, that upon the completion of the necessary enlargement and improvements of the airport at Tientsin, the airport at Peiping will no longer be used for international traffic purposes by American aircraft flying this route.

The Government of China also assures the Government of the United States that there will be no objection to United States carriers designated to serve routes two and three, serving Hong Kong at their option instead of Canton.

The Government of China appreciates the viewpoint of the Government of the United States in desiring that its carriers serve additional international traffic points in Manchuria. The Government of China assures the Government of the United States that it will reopen the question of such service at such time as it becomes feasible, and that United States carriers will be authorized to render such service at the same time that carriers of any third country are so authorized.

I avail myself of this opportunity to renew to Your Excellency, the assurance of my very high consideration.

Please reply immediately and give final instructions on route compromise which seems to be only point now at issue and a meeting is scheduled for Tuesday. [Powell.]

Stuart
  1. Gen. Yu Ta-wei.
  2. See memorandum OSE 610, November 30, by General of the Army George C. Marshall, Special Representative of President Truman in China, p. 1027.
  3. E.A.S. No. 469, or 59 Stat. (pt. 2) 1516.