CONFIDENTIAL
They were welcomed by a representative cross-section of
Contracting Parties, including the EC and Hong Kong.
In doing so, the EC expected full negotiations in due
course: the US and Canada observed that observer status
was without prejudice to the legal position. The
Chinese have said that the Council's decision will
facilitate China's eventual decision on membership.
This is indeed the first step towards eventual
membership, although China recognises the complexities
involved in this, and while making clear that they want
to move ahead with all practicable speed, are not
rushing.
Special Terms
19. As stated above, under Article XXXIII of the GATT,
special terms may be agreed by a 2/3 majority of
Contracting Parties as the price of membership for an
applicant country. In addition, Article XXXV provides
for any existing member to decline unilaterally to be
bound towards a new member. Thus the EC could threaten
not to apply the protocol, and not to accord GATT
rights to China, unless satisfactory special terms were
included. There is precedent too, for using Article
XXXV selectively, to apply some elements of the GATT
while retaining greater flexibility in others. In the
case of Japan, for example, the UK (with many others)
CONFIDENTIAL