Mr Goodfellow (HK&IOD)
Reference
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Minute
the Clark TPD. the Withams
23
REGISTRY NO.51
100CT, 2
NKKG
HONG KONG'S GATT RELATIONSHIP WITH THE ENLARGED EEC
It
1. I refer to the Article XIX problem raised by Mr Williams. I have discussed this with Mr Sinclair, and we both feel that this is an extremely difficult problem which we cannot answer without doing further research. really raises the whole question of EEC practice within the GATT and in particular their practice under Article XIX. DTI may have some knowledge of this, but as you know we in this Office are almost totally in the dark about the practical side of EEC's participation in the GATT.
2. Leaving aside for the moment any complications arising out of the transitional arrangements or out of the escape clauses in the European treaties themselves, the position of a customs union within GATT is far from clear. The problem is touched on by Jackson on page 103 of "World Trade and the Law of GATT":
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"Although the GATT does not explicitly define the role of a customs union in GATT clauses of GATT could be used to establish an argument favouring a special status. It has already been noted that Article XXIV, paragraph 1 applies GATT to "customs territories" and paragraph 8(a) of the same article states that a "customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories Article XXVI, paragraph 5(c), provides that a customs territory "in respect of which a contracting party has accepted this Agreement" can, if it acquires "full autonomy in the conduct of its external commercial relations," be "deemed" a contracting party. It is interesting to ponder whether a customs union could ever advance to a position where it could argue that it comes under this clause of paragraph 5(c)."
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Another interesting passage in the same book is on pages 616/7 where Jackson discusses the problem that arose concerning Article 109 of the Treaty of Rome which provides for ac ion by the other Member States when one Member State is in balance-of-payments difficulties. GATT Working Party studying the Treaty of Rome "expressed concern that under the Rome Treaty provisions a Member State would be permitted to use quantitative restrictions not justified by its own balance-of-payments position" The Community argument was that Article XXIV dispensed the Member States individually from observing the GATT provisions, and that their only obligation was to fulfill
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