CONFIDENTIAL
future should not be put at risk in this way. This
factor alone gives us the strongest possible political
interest in not falling out with the Chinese over their
desire to participate in the GATT. If a Chinese
application were to fail, it is essential that the
Chinese should not attach blame to Britain. It is
unlikely that countries hostile to Chinese accession
would expect our support in resisting it; they will
understand the predicament in which our responsibility
for Hong Kong places us.
TRADE POLICY ASPECTS
State Trading Countries and the GATT
10.
GATT is an organisation which seeks to lay down
rules for the open trading system. Difficulties are
bound to arise when state trading countries, which for
the most part reject market discipline as a basis for
running their own economies, seek to subscribe to it.
Concepts like "subsidy" and "dumping", which are
important in a GATT context, have no real meaning
outside the market economy. A number of state traders
(eg Poland, Hungary, Romania) are nonetheless founder
members or have acceded to the GATT by means of special
Protocols of Accession designed to cope with some of
these difficulties.
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