CONFIDENTIAL

4.

The first meeting of the Joint Liaison Group (JLG) took place in London in July 1985, the second meeting in

Peking November 1985 and the third meeting in Hong Kong 11-14 March 1986. The first meeting got off to a good start with agreement reached on working methods and Hong Kong's continued participation in the Asian Development

Bank.

5.

The second meeting was dominated by Chinese concerns about the development of representative government in Hong

Kong. We succeeded somewhat in reassuring them that we had

no preconceived ideas about the 1987 review and that our

aim was to ensure that developments in representative government before 1997 and the Basic Law to be drafted by

the Chinese would converge.

Also at the second meeting

agreement was reached in principle on the wording of

of an

endorsement for BN (0) passports concerning holders' right of abode in Hong Kong. This endorsement will be of help in securing wide international recognition of the BN (0)

passport.

6.

The Chinese

The third meeting of the Joint Liaison Group took

place in Hong Kong from 11-14 March and was the most

productive so far. Agreement was finally reached in the

route that should be used to ensure the continued

participation of Hong Kong in the GATT.

accepted our proposal that Hong Kong should be deemed to be

а separate contracting party under Article XXVI (5)(c).

This process was duly followed and Hong Kong is now a separate contracting party to the GATT. The next meeting

will be in London from 22-25 July 1986.

CONFIDENTIAL

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