CONFIDENTIAL
CONCLUSIONS
23.
(i) HMG, like other Western Governments should avoid undertaking additional trade obligations if the foreseeable consequences of those obligations cannot be defended politically. This is likely
to be the case if the obligations are not effectively reciprocated. This is already a source of strain on the GATT system.
(ii) If China applied for full membership of GATT, many Western and developing countries would never- theless, on general political grounds, be inclined to welcome it in principle.
IMPLICATIONS:
(iii) In economic and GATT terms, there would probably
be more disadvantages than advantages. It is unlikely that many countries would regard these considerations as of decisive importance provided that China could be brought to accept terms which adequately reflected her state-trading status.
(iv) Such terms would be more difficult to secure if China sought to resume her former seat without negotiation; but this is likely to be resisted (and justifiably so) by the generality of Contracting
Parties.
(v)
Chinese accession would in the long run make it much more difficult to reject a Soviet application for membership. Soviet accession would probably destroy the GATT as we know it. We should encourage fellow developed countries to consider this risk carefully in weighing the pros and cons of Chinese membership and ensure that Chinese accession will not constitute a precedent for Soviet membership.