When the Canadian Government designated Canadian Pacific Air Lines to oper­ate air services to the Pacific region it was anticipated that one route would be to the north via Alaska, Tokyo, Shanghai and Hong Kong. Canadian Pacific Air Lines have indicated that in addition to the value, on a long‑term basis, of stops in China on this route, there is at present a great amount of traffic being generated on the Shanghai‑Hong Kong portion of the route. Since they anticipate being able to begin operations towards the end of this summer, C.P.A. have requested us to secure the necessary traffic rights for them in China. This would require the negotiation of a bilateral air agreement with China.

2, Beyond these economic arguments advanced by C.P.A. and which are sup­ported by the Minister of Transport, I believe there are certain political advantages in concluding an air agreement with the present Government of China even though its future is uncertain. In the event of a change of government, it would be prefera­ble to take the risk that a Communist‑controlled government would honour the existing obligations of the former government rather than be forced to prematurely raise the question of directly recognizing a new government by approaching them to negotiate an air agreement.

3. On the other hand, it was thought that consideration should be given as to whether, should the present Government of China fall, there would be a certain disadvantage from the security point of view, in having an agreement with a Com­munist‑controlled government which would give them the right to fly their civil aircraft over Canadian territory or land at specified Canadian airports.

4. The Chiefs of Staff Committee meeting on April 5, however, cleared the pro­posal for an air agreement with China from the security point of view. In addition, Article X of the proposed agreement permits its termination three months after the date of receipt of the notice of termination by either contracting party.

5. Informal explorations have already been made by our Ambassador in China who has reported that the present Chinese administration is prepared to negotiate a bilateral air agreement.¹⁰

6. It has been the practice for bilateral air agreements to be negotiated on the authority of the Secretary of State for External Affairs, and the Minister of Trans­port, without seeking special authority from Cabinet. The Minister of Transport has already informed the chairman of the Air Transport Board that he agrees to the opening of negotiations with the Chinese Government. If you agree, therefore, I will instruct our Ambassador in China to formally approach the Chinese Govern­ment and propose the negotiation of a bilateral air agreement.

¹⁰Le président du Conseil du transport aérien, J.R. Baldwin, informa le ministere des Affaires exté­rieures, le let avril 1949, que le prddsident du Canadian Pacific Air Lines scout en Chine dans moins d'une semaine et qu'il pourtait aider à la marche des négociations. Plumptre vdid not feel that the Air Transport Board consulted fully with this Department. avant de suggdrer quo le pr6sident du C.P.A. parte pour la Chine (Note du chef, direction de I'ddconomie, pour le sous‑secrdtaire d'Etat adjoint aux Affaires ext&ieures, le 2 avril 1949, DEA/72‑BP‑2‑00).
The Chairman of the Air Transport Board, J.R. Baldwin, informed the Department of External Affairs on April 1, 1949 that the President of Canadian Pacific Air Lines would be in China within the week and that he would be able to assist with negotiations. Plumptre "did not feel that the Air Transport Board consulted fully with this Department" before suggesting that the President of C.P.A. depart for China (Memorandum from Head, Economic Division to Deputy Under‑Secretary of State for External Affairs, April 2, 1949, DEAl72‑BP‑2‑40).