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could well become a live issue in the near future and I should therefore be glad of your confirmation that we can or cannot retaliate against a third country on Hong Kong's behalf. In considering this you might like to see paragraph 2 of Mr. Steel's minute of 11 June in which he expresses the view that we would be to account for any default on Hong Kong's part and we alone could secure reparation on Hong Kong's behalf for any default by another party. As requested in your minute of 27 July, I attach a copy of the complete brief prepared for Sir A. Part's visit to Geneva last month.
Mowforth
Commo
(R. Mowforth) modities Department
17 August, 1970.
The general position in international law is as stated by Mr. Steel in his minute of 11 June and subsequently expressed by me on HK 6/18 of 1970, namely hamely that any wrongful or other action (such as retaliation) taken against Hong Kong is, in legal terms, taken against the U.K. Thus, subject to any exception which might have been created in international agreements, the U.K., and only the U.K., could retaliate in respect of such action taken against Hong Kong by third countries.
2. I have looked at the terms of the GATT and the relevant provisions appear to be Articles XXIV and XXVI. By Article XXIV the Agreement applies to the metropolitan customs territories of contracting parties and to any other customs territories in respect of which the Agreement has been accepted under Article XXVI or is being applied under Article XX. Each such customs territory shall "exclusively for the purposes of the territorial application" of the Agreement, be treated as if it were a separate contracting party. The proviso to this (namely that the concept of certain dependent territoris den A treated in this limited way as contracting parties does not apply as between two dependencies or the parent State and the dependency) does not concern us in the present circumstances.
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