FO GVE 008/23
GENEVA
GRS 660
CONFIDENTIAL
TELELETTER
A C GALSWORTHY
HKK 040/24 DATED 22 APRIL 1985
HKCK #KK 040/24
FOLLOWING FOR JD 1 BOYD ESQ, POLITICAL ADVISER,
CC:
DAME ANNE WARBURTON, UKMIS GENEVA
D G BLUNT ESQ, PEKING
MISS RJ SPENCER UKMIS BRUSSELS
A J LANE ESQ DTP
COPIED TO PRN FIFOOT ESQ, LEGAL ADVISERS, FCO
HONG KONG AND THE GATT
HONG KONG
R
1. 1 KNOW THAT YOU WISH TO PUT PROPOSALS ON GATT TO EXCO AS SOON AS POSSIBLE, (YOUR TELNOS 294 AND 565) AND IT MAY BE HELPFUL TO BRING YOU UP TO DATE WITH OUR THINKING. WE AGREE WITH YOU AND PEKING (YOUR SECOND TUR AND PEKING TELNO 375) THAT WE SHOULD WORK OUT OUR POSITION IN TIME FOR THE FIRST MEETING OF THE JOINT LIAISON GROUP. INDEED WE BELIEVE THAT WE SHOULD AIM TO PRODUCE A PAPER FOR DISCUSSION WITH THE CHINESE AT THAT MEETHING.
2. HAVING RECEIVED DAME ANNE WARBURTON'S TELELETTER OF 11 MARCH, WE HAVE CONSULTED FRED BURROWS AND THE DTI ABOUT THE PROCEDURE WHICH THE GATT LEGAL ADVISER SUGGESTS FOR SEEKING CONTRACTING
PARTY
STATUS FOR HONG KONG (PARA 5 OF TLUR). THIS PROCEDURE IS BROADLY SIMILAR TO THE PROPOSALS IN PARAS 2 AND 3 OF OUR TELNO 509 OF 1984, AND, GENERALLY SPEAKING, WE ARE HAPPY TO GO ALONG WITH THE IDEA OF THREE DECLARATIONS. 3. #N LIGHT OF THE GATT LEGAL
ADVISER'S COMMENTS WE HAVE PRODUCED HILLUSTRATIVE FIRST DRAFTS OF
THE THREE TYPES OF DECLARATION REFERRED TO IN PARA 5 OF TLUR (SEE
MIFTL). WE SENT THESE DRAFTS TO THE DTH FOR THEIR COMMENTS AND
IN DOING SO DREW THEIR ATTENTION TO THE FOLLOWING POINTS:
(A) OUR LEGAL ADVISERS HAVE POINTED OUT THAT THE GATT DRAWS NO DISTINCTION BETWEEN 'DE JURE' AND 'DE FACTO' PARTIES AND THAT WE
SHOULD NOT ACCEPT THAT ANY SUCH DISTINCTION EXISTS, NOR DEPOSIT
ANY DOCUMENT WITH THE DIRECTOR-GENERAL WHICH USES THOSE TERMS.
ACTION BY US BEFORE 1997 UNDER ARTICLE XXVI (5) (C) OUGHT TO
RESULT IN HONG KONG BENING 'DEEMED TO BEING A CONTRACTING PARTY*.
(B) WHILST WE CAN SEE SOME PRESENTATIONAL ADVANTAGES IN THE HONG
KONG GOVERNMENT DEPOSITING A DECLARATION, WHICH REFERRED TO THE
UK'S DECLARATION AND CONFIRMED THAT IT WISHED TO BE DEEMED A
CONTRACTING PARTY IN ACCORDANCE WITH ARTICLE XXVI (5) (C), LEGAL ADVICE HERE IS THAT SUCH A DECLARATION IS NOT ESSENTIAL.
(C) GIVEN OUR VERY DIFFERENT VIEWS ON SOVEREIGNTY OVER HONG KONG, WE MIGHT FIND IT DIFFICULT TO GET THE PRC TO REFER EXPRESSLY TO THE TERMS OF OUR DECLARATION UNDER ARTICLE XXVI
(5)*
(C). WE THEREFORE HAVE TO DRAFT IN LANGUAGE WHICH IS EFFECTIVE FOR GATT PURPOSES, CONSISTENT WITH THE LANGUAGE OF THE JOINT DECLARATION AND NEUTRAL ON THE SOVEREIGNTY ISSUE.
IN
4. THE DTI CAN SEE NO OBVIOUS DIFFICULTIES WITH THE DRAFT DECLARATIONS BUT WOULD LIKE UKMIS GENEVA TO COMMENT ON THEM.
THE LIGHT OF THESE COMMENTS YOU MAY WISH TO PUT IN HAND AN EXCO PAPER ON THE GATT. WE THINK THAT YOU WOULD BE BETTER PLACED THAN US TO PREPARE A FIRST DRAFT, ON WHICH UKMIS GENEVA, THE DTI AND WE COULD COMMENT.
5.
LOOKING TO THE FUTURE, WE CANNOT RULE OUT THE POSSIBILITY THAT IN THE JLG THE CHINESE MIGHT OBJECT TO HONG KONG BECOMING A SEPARATE CONTRACTING PARTY TO THE GATT. WE SHALL THUS NEED TO CONSIDER HOW WE CAN COUNTER ANY SUCH OBJECTION. WE SHOULD NO DOUBT ARGUE THAT OPPOSITION TO SUCH A COURSE BY THE PRC WOULD GIVE THE IMPRESSION THAT SHE WAS TRYING TO LIMIT THE AUTONOMY IN COMMERCIAL RELATIONS WHICH THE AGREEMENT GRANTS TO HONG KONG, WITH CONSEQUENTIAL DAMAGE TO INVESTOR CONFIDENCE. CONVERSELY, PRC SUPPORT FOR OUR PROPOSAL WOULD GIVE A CLEAR HINDICATION OF THE IR COMMITMENT TO THE ECONOMIC PROVISIONS OF THE AGREEMENT AND WOULD ENCOURAGE INVESTORS. WE COULD ALSO SAY THAT AS MACHINERY EXISTS WHEREBY HONG KONG CAN BECOME A SEPARATE CONTRACTING PARTY TO GATT, IT WOULD MAKE MORE SENSE TO PURSUE THIS COURSE THAN TO HAVE, AFTER 1997, TWO TOTALLY DIFFERENT TRADING SYSTEMS REPRESENTED IN A SINGLE GATT DELEGATION.
6. ANY MORE SPECIFIC DIFFICULTIES WHICH YOU OR UKMIS GENEVA COULD FORESEE IF HONG KONG WERE NOT TO BECOME A SEPARATE CONTRACTING PARTY TO GATT WOULD OF COURSE ADD TO OUR CASE AND WE SHOULD WELCOME YOUR VIEWS ON THESE.
SIGNED A C GALSWORTHY
NNNN
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