Archive

Large scale document archive

1984 Dec 21 Fr
Archive (Reagan Library)

Economy: Reagan letter to Thatcher (& briefing) (civil aviation) [declassified 2000]

Document type: Declassified documents
Document kind: Archive
Venue: White House
Source: (1) & (2) Reagan Library: European & Soviet Directorate, NSC: Records (Thatcher Visit - Dec 84 [1] Box 909092); (3) Reagan Library: NSA Head of State File (Box 36)
Journalist: -
Editorial comments: The letter was delivered urgently to MT at the British Embassy in Washington, via the State Department (Kimmitt memorandum to Charles Hill, 21 Dec 1984) (same file).
Importance ranking: Major
Word count: 664 words
Themes: Trade, Foreign policy (USA), Law & order, Transport

(1) Peter Sommer briefing for Robert McFarlane:

Confidential

December 20, 1984

MEMORANDUM FOR ROBERT C. McFARLANE
FROM: PETER R. SOMMER
SUBJECT: Reply to Mrs. Thatcher on Civil Aviation

As you know, we have been less than satisfied with the British response to the President’s courageous decision to drop the grand jury investigation of alleged criminal antitrust violationns in connection with the Laker bankruptcy case. The President’s briefing package for the Thatcher Visit addresses our concerns in some detail, and recommends that the President personally tell Mrs. Thatcher of our dissatisfaction. State has now provided a draft response to Mrs. Thatcher’s latest letter on this subject, and if we could arrange for Presidential signature before tomorrow evening, we could have his reply delivered to the British Embassy for Mrs. Thatcher’s personal attention.

(2) Robert McFarlane briefing for the President:

Confidential

MEMORANDUM FOR THE PRESIDENT
FROM: ROBERT C. McFARLANE
SUBJECT: Reply to Mrs. Thatcher on Civil Aviation

To sign the reply to Mrs. Thatcher regarding civil aviation.

Facts
My separate briefing package on the Thatcher visit addresses in some detail our deep dissatisfaction with Britain’s reaction to your significant decision to close the grand jury investigation of alleged criminal antitrust violns in connection with the Laker bankruptcy case.

Discussion
Since that decision, senior US officials – including Secretary Shultz – have pressed British Ministers to take positive steps to liberalize the current aviation regime. The British have been singularly unhelpful, though Mrs. Thatcher did agree in her latest letter (Tab B) to lower winter fares. In our view, this is not an adequate step. Furthermore, the British are pressing for us to introduce legislation to waive treble damages contained in our antitrust legislation. Congress would reject such a proposal. Your reply indicates that linking further progress on liberalizing the aviation regime to a spending change in US legislation is unrealistic, and goes on to encourage greater British flexibility.

(3) Reagan letter to Thatcher:

Declassified F96-107#311
By SMF, NARA, Date 3/28/00

The White House
Washington

December 21. 1984

Dear Margaret:

Thank you for your recent letter concerning civil aviation.

I remain hopeful that we will continue to improve the competitive conditions of international air transportation between our two countries. We are deeply disappointed, however, that you appear to condition new steps toward this goal on legislation that would eliminate private antitrust actions, especially since you and I share the goal of increasing competition in trade. I believe that more competition in air transportation between our two countries will serve both to benefit our consumers and to strengthen our airlines. This should not, in our view, be linked to a specific change in US legislation which is at present unrealistic.

I have been informed that Secretary Shultz and Ambassador Price have explained to your ministers that we do not believe legislation to eliminate treble damages is necessary in order for our airlines to operate free of litigation in a more competitive environment. I further understand that adequate means are currently available under US law, and Bermuda II aviation agreement to provide any necessary protection from antitrust suits, as has been demonstrated by British Airways’ long and favorable experience with US antitrust law.

I am hopeful that after your ministers have reviewed the information Ambassador Price and others have provided them concerning US [end p1] antitrust laws, you will conclude that we can open up the aviation regime without legislation on private antitrust suits. Indeed, we view such movement as essential if we are to be able in the future to contemplate any legislative action regarding private suits. I hope that you will be able to instruct your negotiators to resume our discussions promptly on this basis.

I look forward very much to seeing you Saturday at Camp David.

Sincerely,
Ron