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XXVI(5)(C) ROUTE. WE HAVE THEREFORE BASED THESE PARAGRAPHS ON

WE HAVE, HOWEVER,

THE REVISED PARAS 5 10 IN UKMIS TELNO 237.

-

MADE SOME CHANGES SO AS TO:

A)

SIMPLIFY THE LANGUAGE AS FAR AS WE CAN:

B) OMIT ANY REFERENCE TO THE PRC AS THE FUTURE SOVEREIGN AUTHORITY IN HONG KONG' (PARA 7 OF UKMIS TUR) WHICH WOULD CLEARLY BE UNACCEPTABLE TO THE CHINESE:

C) OMIT THE SPECIFIC REFERENCE TO THE REPRESENTATIVE OF HONG KONG' SUBMITTING HONG KONG'S STATEMENT TO THE GATT (PARA 8 OF UKMIS TUR) WHICH, TO US, DOES NOT ACCORD WELL WITH THE REFERENCE IN THE PROPOSED PRC DECLARATION (PARA 1(C) OF OUR TELNO 782) TO 'THE COMMUNICATIONS WHICH THE UNITED KINGDOM MISSION IN GENEVA HAS TODAY ADDRESSED TO TEE DIRECTOR GENERAL':

D) CORRECT THE IMPRESSION (FINAL SENTENCE OF PARA 8 OF UKMIS TUR) THAT AS OF NOW THE GATT IS NEXT WORD UNDERLINED NOT APPLICABLE TO HONG KONG. THE POINT ABOUT WHICH THE GATT SECRETARIAT WOULD NOTIFY CONTRACTING PARTIES WOULD BE THAT HONG KONG'S NEXT WORD UNDERLINED STATUS WITHIN THE GATT HAD CHANGED. PARAS 12

13

6. WE HAVE EXPANDED YOUR ORIGINAL SECTION ON HONG KONG AND THE MFA.

WE SHOULD BE GRATEFUL IF UKMIS GENEVA COULD CONFIRM OUR UNDERSTANDING THAT APART FROM THE POSSIBILITY OF HONG KONG'S CONTINUING ACCEPTANCE OF THE MFA THERE ARE NO ADDITIONAL SIMILAR IMPLICATIONS OF FULL CONTRACTING PARTY STATUS IN THE GATT FOR HONG KONG WHICH WE WOULD NEED TO SPELL OUT IN THIS PAPER. PARAS 14

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17

7. WE WOULD PARTICULARLY WELCOME URGENT COMMENTS FROM UKREP BRUSSELS ON THESE PARAS. WE ALSO AWAIT THEIR VIEWS ON THE PROPOSED DRAFT DECLARATIONS TO THE CCC UNDER THE ARTICLE II(A)(II) PROCEDURE. OUR TELNO 212 TO THEM REFERS.

8.

GRATEFUL IF YOU WOULD SET IN HAND A CHINESE TRANSLATION OF THE PAPER.

HOWE

HONG KONG AGREEMENT

LIMITED

HD/HKD

HD/FED

HD/PLANNING STAFF

HD/PUSD

DEP HD/PUSD

RESEARCH DEPT (MR WALKER)

PS

PS/MR LUCE

PS/PUS

SIR W HARDING

MR WILSON

SIR J FREELAND

MR J CROWLEY, PUSD

COPIES TO: (VIA ADR)

- MR ROBERTS, NEWS DEPT

MR FIFOOT, LEGAL ADVISERS

MR MARTIN, ASST STAFF CABINET

OFFICE

LR MALLABY CABINET OFFICE ER DR C CHRISTOPHER. CABINET OFF. SIR P CRADDOCK, No. 10 DOWNING ST.

CONFIDENTIAL

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