CONFIDENTIAL
THE EFFECT OF UK. ENTRY INTO THE E E C. ON HONG KONG RIGHTS UNDER THE GATT
13. Both Britain and the Six individually are contracting
parties to the GATT. The enlargement of the Community would
not in itself change this. Hong Kong has GATT rights and
obligations vis-a-via the Six in virtue of the declaration
made by Britain under Article XXVI as a metropolitan power,
and we exercise Hong Kong's rights in the GATT on her behalf.
Hong Kong as a British Dependent Territory does not have
GATT rights and obligations vis-a-vis Britain, but it is just
possible that a unilateral declaration by Britain that we
regard GATT rights and obligations as existing between
ourselves and Hong Kong would pass unchallenged, but it is diffi- cult to see what practical advantages would result from such a declaration. 14.
None of this would weaken Hong Kong's legal position
after British entry since Hong Kong's rights against the Six
would effectively give her rights against the whole enlarged
Community. But there is a practical problem over the exercise
of Hong Kong's rights. After entering, we could clearly not
speak up in the GATT on Hong Kong's behalf against the policy
of a Community of which we were a member, though we could,
of course, bring strong pressure to bear on Hong Kong's
behalf within the Community machinery.
Nevertheless, the
Hong Kong authorities may well feel that it would be desirable,
as a long stop, for them to be able to exercise their GATT
rights directly without relying on Britain.
15. The simplest way of achieving this would be for Hong Kong
to be given her own voice in the GATT. She could achieve this
either by becoming a contracting party in her own rights, or
by having the GATT applied to her de facto. But both these
courses would require Britain to devolve on Hong Kong "full
autonomy in the conduct of her external commercial relations".
This possibility has been investigated, but we agree with the
provisional Hong Kong view that the political objections
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CONFIDENTIAL