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under Article XXVI:5(c) is totally different from being treated as though one is a contracting party under Article XXIV:1. Indeed, the practice under Article XXVI:5(c) indicates that, whatever may have been the original intention, the present function of Article XXVI:5(c) is to enable newly independent States to become, by a form of state succession, contracting parties.
10. I agree with the views expressed in paragraph 7 and 8 of Miss Elliott's letter with one qualification. While it is clear that the intention behind those who drafted Article XXVI:5(c) was that rights and obligations should subsist between the sponsoring contracting party and the customs territory deemed to be a contracting party, it is far from clear what law, if any, would govern these rights and obligations in a case where the customs territory deemed to be a contracting party does not have international legal personality (which means in effect is not an independent State). In practice, of course, United Kingdom and Hong Kong Governments could work on the basis that their relations were governed by public international law (i.e. by the General Agreement), though in fact this would not be the case.
7).
11. Article XXVI:5(c) applies only to a customs territory which "possesses or acquires full autonomy in the conduct of its external commercial relations and of the other matters provided for in the Agreement". This appears, in practice to amount to something very close to independence. In discussing Article XXVI:5(c), DAN refers only to its application to newly independent States (see DAM, The GATT: Law and International Economic Organisation, pages 109, 345 Kunugi, after setting out the drafting history of the clause on lines similar to those of paragraph 7 of Miss Elliott's letter concludes: "However, since the date of acquiring full autonomy in external commercial relations almost always coincided with the date of acquiring full independence, this special clause has provided a convenient formula a flexible application of which has in fact facilitated state succession" (Kunugi, State Succession in the framework of GATT, 59 AJIL 268.270).
M. C. Wood
MC Wood
Legal Advisers Dept. K.157.
Main A.260
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