CONFIDENTIAL #B

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(b) to ensure the continued application

to the Hong Kong SAR of international

rights and obligations now affecting

Hong Kong.

The purpose of this Memorandum is to seek

Members' advice on the best line of action to

be taken to secure Hong Kong's continued

participation in the General Agreement on

Tariffs and Trade (GATT) and the Customs

Co-operation Council (CCC) beyond 30 June 1997.

Participation in the GATT

Hong Kong's present status

3.

Hong Kong derives its GATT rights

and obligations from its position as a dependent

territory of the United Kingdom which accepted

the GATT also in respect of territories for

which its has international responsibility.

Hong Kong's current de facto status in the GATT

will therefore cease to exist after 30 June 1997

following the change of sovereignty unless some

means could be found to transmit such status

to the SAR.

4.

China is not currently a member of

the GATT but is attending its meeting as an

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