CONFIDENTIAL
bring her tariff into conformity with the 1950
schedule. We would however argue that neither the
other members of the GATT nor the Chinese Government
had at any time acted as if China was a contracting
party since Nationalist China formally withdrew from
the GATT in 1950 (certainly the Contracting Parties
have not acted as if there were a vacant seat:
unanimous decisions have been taken, and tariff
preferences enjoyed by Taiwan before 1950 have been
revoked by several CPs, including the UK, France and
the US); and that China has taken no steps to preserve
its position and could not simply take up the empty
seat without making a fresh application.
The Chinese
might find it politically difficult to abandon their
claim to the old Chinese seat but they might be
prepared to disarm opposition by offering some form of
assurance to trading partners in place of a negotiated
protocol (e.g. by offering to conclude degressive VRAS
in place of existing QRS). And the evidence is that
the Chinese accept the obligation to negotiate the
terms under which they would be allowed to resume
membership.
18. The Chinese have now been admitted by the GATT
Council as observers (without voting rights) to
meetings of the Council and its subordinate bodies.
CONFIDENTIAL
Page 120Page 121