CONFIDENTIAL
21932
1
BECAUSE IT MIGHT BE REPRESENTED THAT HONG KONG WAS TRYING TO GAIN
ENTRY TO GATT THROUGH THE BACK DOOR HAVING FAILED TO GET IN
THROUGH THE FRONT. EVEN IF A BELATED ARTICLE XXVI 5(C)
DECLARATION IN HONG KONG'S FAVOUR COULD NOT BE STOPPED, HONG KONG'S
EVENTUAL STANDING IN GATT COULD BE SERIOUSLY UNDERMINED.
10.
FOR ALL THESE REASONS, OPTION 2 WOULD APPEAR TO MAKE HONG
KONG HOSTAGE TO THOSE WHO MIGHT SEEK ADVANTAGE AT OUR EXPENSE.
IT SHOULD NOT, THEREFORE, BE PURSUED.
11.
OPTION 3 IS LESS PROBLEMATIC AND BY FAR THE MOST DESIRABLE
AND PRACTICAL. IT WOULD:
(A) BE INDEPENDENT OF THE QUESTION OF CHINA'S MEMBERSHIP IN THE
GATT:
(B) AVOID HAVING TO INVOLVE HONG KONG IN NEGOTIATING ENTRY TERMS
WITH THE CONTRACTING PARTIES:-
(C) ENABLE HONG KONG TO ACQUIRE SEPARATE GATT STATUS AT ANY TIME
MUTUALLY ACCEPTABLE TO CHINA, THE UK AND HONG KONG THROUGH A
DECLARATION BY THE UNITED KINGDOM.
A FURTHER IMPORTANT POINT IN FAVOUR OF THIS COURSE IS THAT:
(D) HONG KONG HAVING BECOME A SEPARATE CONTRACTING PARTY UNDER
THE GATT ARTICLE XXVI 5(C) PROCEDURE, AND HAVING REGARD TO THE
ARRANGEMENTS PROPOSED IN SECTION VI OF ANNEX I TO THE JOINT
DECLARATION, IT COULD BE MAINTAINED THAT THE MERE CHANGE OF
SOVEREIGNTY IN 1997 WOULD NOT IN ITSELF HAVE ANY EFFECT UPON HONG
KONG'S RIGHTS OR STATUS IN THE GATT.
12.
THE OBSERVATIONS IN PARAGRAPHS 8 AND 11(D) ABOVE ARE BASED
ON INFORMAL SOUNDINGS WHICH THE UNITED KINGDOM MISSION IN GENEVA
AND THE COUNSELLOR (HONG KONG) IN GENEVA HAVE TAKEN OF THE LEGAL
SECTION OF THE GATT SECRETARIAT. THEIR VIEW IS THAT IF HONG KONG
WERE TO BECOME A CONTRACTING PARTY UNDER THE ARTICLE XXVI 5(C)
PROCEDURE, THERE WOULD BE NO QUESTION OF CONTRACTING PARTY STATUS
CEASING SOLELY BY VIRTUE OF THE CHANGE OF SOVEREIGNTY IN 1997.
ONLY IF HONG KONG'S AUTONOMY IN THE CONDUCT OF ITS EXTERNAL
COMMERCIAL RELATIONS WERE TO BE TERMINATED WOULD THERE BE ANY
QUESTION OF A SUSPENSION OR TERMINATION OF SUCH STATUS. THE
QUESTION OF SUSPENSION HAD PREVIOUSLY ARISEN WHEN SOUTHERN RHODESIA ISSUED ITS UNILATERAL DECLARATION OF INDEPENDENCE AND
4
CONFIDENTIAL