11.
FOR ALL THESE REASONS OPTION 2 WOULD APPEAR TO MAKE HONG KONG HOSTAGE TO THOSE SEEKING ADVANTAGE AT OUR EXPENSE, AND SHOULD NOT BE PURSUED.
:
12. OPTION 3 IS LESS PROBLEMATIC AND BY FAR THE MOST DESIRABLE AND PRACTICAL IN THE CIRCUMSTANCES, BECAUSE IT :
(A) PARRIES THE QUESTION OF CHINA'S MEMBERSHIP IN THE GATT:
(B) AVOIDS HAVING TO INVOLVE HONG KONG IN NEGOTIATION OF
ENTRY TERMS WITH THE CONTRACTING PARTIES:
(C) ENABLES 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: AND
(D) ONCE HONG KONG BECAME A SEPARATE CONTRACTING PARTY UNDER THE GATT ARTICLE XXVI 5(C) PROCEDURE, THERE IS REASON TO
BELIEVE THAT THE MERE CHANGE OF SOVEREIGNTY IN 1997 WOULD
NOT IN ITSELF HAVE ANY EFFECT UPON HONG KONG'S GATT RIGHTS
OR UPON ITS UNDERLINE NEXT FOUR WORDS DE FACTO/DE JURE STATUS
IN THE GATT.
13. THE OBSERVATIONS AT PARAGRAPHS 8 AND 12 (D) ABOVE ARE BASED ON
INFORMAL SOUNDINGS BY THE UNITED KINGDOM MISSION IN GENEVA,
TOGETHER WITH THE COUNSELLOR (HONG KONG), OF THE GATT SECRETARIAT
LEGAL SECTION ON A HYPOTHETICAL BASIS. THEIR VIEW WAS THAT IF HONG
KONG BECAME A CONTRACTING PARTY UNDER ARTICLE XXVI 5(C) PROCEDURE,
THERE WOULD BE NO QUESTION OF THAT 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
WAS TERMINATED WOULD THERE BE ANY QUESTION OF A SUSPENSION OR
TERMINATION OF SUCH STATUS. THIS HAD, IN FACT, OCCURRED WITH SOUTHERN RHODESIA ON ITS UNILATERAL DECLARATION OF INDEPENDENCE AND
THE UK SUSPENDED ITS EARLIER DECLARATION. EVEN IN THAT CASE THE
QUESTION OF WHETHER SOUTHERN RHODESIA'S GATT STATUS HAD REALLY BEEN SUSPENDED WAS AT BEST UNCLEAR, AND THE GATT MAINTAINED THE NAME
OF SOUTHERN RHODESIA IN ITS DOCUMENTATION AND CONTINUED TO ALLOCATE
PAPERS WHICH WERE NOT SENT OUT BE WERE HELD IN STORE IN THE GATT
PENDING SOME RESOLUTION OF THE SITUATION.
TIMING
14. EARLY RESOLUTION OF HONG KONG'S POST-1997 STATUS IN THE GATT
WILL REASSURE BOTH THE COMMUNITY AT LARGE IN HONG KONG AND ITS
TRADING PARTNERS THAT THE BASIS FOR HONG KONG'S FLOURISHING FREE
MARKET ECONOMY WILL BE ABLE TO CONTINUE. FURTHERMORE, HAVING REGARD
TO PARAGRAPH 4 OF ANNEX II TO THE JOINT DECLARATION THIS IMPORTANT
ISSUE MIGHT WELL BE ADDRESSED AT THE FIRST OR SECOND MEETING OF THE
JLG. MOREOVER, IT WOULD BE IN HONG KONG'S INTEREST TO SECURE WHAT IT DESIRES AS SOON AS POSSIBLE, HOPEFULLY WELL BEFORE TOO MUCH
ATTENTION IS DRAWN TO CHINA'S INTENTIONS VIS-A-VIS THE GATT AS IS
LIKELY TO HAPPEN WHEN THE CONTRACTING PARTIES START TO REVIEW
CHINA'S CURRENT OBWERVER STATUS IN THE GATT.
ex
CONFIDENTAL
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