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suspicions of other Contracting Parties. He had frequently been asked informally about what was to happen after 1997, and whether China would then have two votes. His explanations that GATT did not normally operate on a voting basis had been insufficient to reassure those who feared that after 1997 China would be able to speak with two voices in GATT. It was clear that these apprehensions extended beyond Hong Kong to the implications for Macao and even Taiwan.

3. Dunkel's remarks add force to the case for a major lobbying exercise if and when the Chinese accept our proposals. In this respect, we agree with the suggestions for lobbying contained in Hong Kong telegram No 257, paragraphs 5-7.

Jurs

ever,

John Sankey

JA Sankey

Copies:

MDC Johnson Esq, ITP, DTI RQ Braithwaite Esq CMG, FCO J A Shepherd Esq, ECD (E), FCO A C Galsworthy Esq, HKD, FCO Miss R J Spencer, UKRep Brussels J Boyd Esq, Hong Kong

CONFIDENTIAL

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