The Acting Secretary of State to the Ambassador in China ( Stuart )
766. Apropos of Brit deviation from Bermuda principles as reflected in recent Brit agreements with Argentina35 and other countries, [Page 1245] US aviation officials have recently returned from London where they discussed matter with Brit and agreed on a joint press statement36 whereby both Govts state their belief that Bermuda (US-UK air transport) agreement is reliable basis for orderly development and expansion of international air transport and that until a multilateral air transport agreement is adopted, Bermuda type agreement represents best form of approach to problem of interim bilateral agreements. Both Govts agree that basic Bermuda principles should be included in negotiating any new bilateral agreements with other countries.
On basis of foregoing, this Govt informally obligated to try include Bermuda principles in all its future bilateral air transport agreements, including those now under negotiation. It is realized that Chinese and Philippine agreements, which are based on Chicago standard form, are virtually ready for signature but if at all possible Dept feels attempt should be made include Bermuda principles therein. During London talks Brit were on point signing several bilateral agreements, but agreed hold them up for revision to include pertinent Bermuda provisions in accord with joint statement above. If bilateral agreement not already signed, you should request addition of final section C in annex reading as follows:
“In the operation of the air services authorized under this agreement, both contracting parties agree to the following principles and objectives:
- Fair and equal opportunity for the airlines of each Contracting Party to operate air services on international routes, and the creation of machinery to obviate unfair competition by unjustifiable increases of frequencies or capacity;
- The elimination of formulae for the predetermination of frequencies or capacity or of any arbitrary division of air traffic between countries and their national airlines;
- The adjustment of Fifth Freedom traffic with regard to:
- traffic requirements between the country of origin and the countries of destination
- the requirements of through airline operation, and
- the traffic requirements of the area through which the airline passes after taking account of local and regional services.”
If agreement not already signed, telegraph Dept if any objection to inclusion foregoing section. If so, you should defer actual signature so that we may notify Brit.
Sent to Nanking; repeated to Shanghai as Depts 1673; repeated to Manila for action as Deptel 379.