CONFIDENTIAL

Contracting Parties to the GATT about Hong Kong's change of status.

within the GATT.

W

HONG KONG AND THE MFA

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ip. The MFA is a negotiated derogation from the normal GATT rules, why modifying the free trade principles of the GATT in the context of

textiles and clothing. Notwithstanding thin, Hong Kong is able to develop its trade within the MFA and the bilateral arrangements negotiated under the provisions.

12. The MFA is open for acceptance by Contracting Parties of the GATT. The United Kingdom has accepted the MFA on Hong Kong's behalf. However, if, as the British side propose Hong Kong (and later the Hong Kong SAR) were to become a separate Contracting Party to the GATT, it is the understanding of the British side that its continuing participation in the errent MFA and in any successor regime would be secured simply by notifying the GATT Director-General of its wishes in this respect.

HONG KONG AND THE CCC

13. Hong Kong's position in the CCC is analagous to that in GATT. Hong Kong currently attends some of the technical meetings of the CCC as part of the UK delegation. However, as stated in paragraph,

Labove, Hong Kong is autonomous in the conduct its external

commercial relations and in accordance with the Joint Declaration on the question of Hong Kong, the Hong Kong SAR will, when

Contave to

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this

The

established, enjoy comparable autonomy, in this respect British side accordingly proposed that they and the Chinese side should agree that appropriate steps be taken as soon as possible to secure Hong Kong's continuing participation in the CCC, up to and after 1997, along the lines envisaged for the GATT.

14 Article II(a)(ii) of the Convention establishing a Customs

Cooperation Council provides for membership of the Council by:

"The government of any separate customs territory which is proposed by a Contracting Party having responsibility for the formal conduct of the diplomatic relations, which is autonomous in the conduct of its external commercial relations and whose admission as a separate

its

CONFIDENTIAL

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