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CONFIDENTIAL

The Policy of developing a separate status for Hong Kong

during the interim period

3.

It is the policy of HMG during the interim period

before 1997 to do what is possible to establish for Hong

Kong, in those areas of activity in which the Joint

Declaration recognises it will have an autonomous or

distinct position or role, a status which is separate

from that of the UK so as to provide the basis for a

continuance of such separate status when Hong Kong reverts

to China in 1997. In pursuance of this policy we are for

example intending to separate Hong Kong from the ambit of

United Kingdom Air Service Agreements and to negotiate

distinct Air Service Agreements applicable only to services

by Hong Kong airlines and airlines of other states between

Hong Kong and those states. A particular and immediate

aspect of this policy is to provide for Hong Kong a

separate status in the GATT.

The GATT

а

4. At present Hong Kong's formal position in the GATT is

a consequence of the United Kingdom's status as

Contracting Party, ie the GATT applies in general to the

dependent territories as well as the metropolitan territory

of the Contracting Parties (Article XXVI 5(a)).

In practical terms however Hong Kong already occupies a

in the organs of the GATT

separate position from that of the United Kingdom. [Hong

3

CONFIDENTIAL

/Kong

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