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5. IN INFORMAL CONTACTS, THE CHINESE HAD INDICATED THET THEY HAD TO EXAMINE THE HONG KONG PROBLEM IN THE CONTEXT OF CHINA AS A WHOLE.
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THEY WERE CONCERNED AT THE BAD EXAMPLE WHICH HONG KONG MIGHT SET TO CANTON PROVINCE AND WERE CONSIDERING WHAT SORT OF BARRIER COULD BE ESTABLISHED TO PREVENT IDEAS FROM HONG KONG AND MACAO SPREADING AFTER 1997. IN VIEW OF THEIR NEED TO SETTLE OTHER OUTSTANDING PROBLEMS, SUCH AS MACAO AND TAIWAN, THEY WEPE CONCERNED THAT HONG KONG SHOULD NOT BE SEEN TO ESTABLISH UNDESIRABLE PRECEDENTS. THEY HAD ASKED WHETHER HONG KONG WOULD HAVE AN INDEPENDENT ''VOTE' IN THE FUTURE TO WHICH TRAN HAD REPLIED THAT HE DID NOT KNOW. HE DENIED CATEGORICALLY THAT HE HAD EVER SUGGESTED THE EC MIGHT NOT WISH HONG KONG TO ACQUIRE SEPARATE CP STATUS.
6. MONTGOMERY THEN BRIEFED TRAN ORALLY ON THE ESSENTIAL FEATURES OF THE UK APPROACH, STRESSING THE IMPORTANCE WE ATTACH TO CONVINCING THE CHINESE OF THE EFFICACY OF THE ARTICLE XXVI (5)(C) POUTE (AND THE INADEQUACIES OF ARTICLE XXIV(1)) AND URGING THAT IN ANY FUTURE CONTACTS WITH THE CHINESE TRAN SHOULD SEEK TO DISABUSE THEM OF ANY SUGGESTION THAT ''SEPARATE CP STATUS' MIGHT BE UNACCEPTABLE TO THE
EC.
1.
AS ALWAYS, TRAN GRASPED THE POINTS AT ISSUE QUICKLY AND THEN STRESSED THE FOLLOWING:
(1) THE CHINESE CLEARLY UNDERSTOOD THAT THERE WAS NO HOPE OF MAKING PROGRESS TOWARDS THEIR OWN ADHERENCE TO GATT UNTIL THE HONG KONG POSITION WAS CLARIFIED. IT WAS NOT JUST TRAN WHO WOULD INSIST UPON CLARIFICATION. THE CHINESE HAD TOLD HIM THAT THE US WERE HIGHLY SUSPICIOUS OF A ''TWO CHINA' SITUATION AND WERE TAKING THE SAME LINE.
(2) HONG KONG MUST BE SEEN IN THE CONTEXT OF CHINA'S TAIWAN PROBLEM.
THERE WAS A SCHOOL OF THOUGHT INSIDE CHINA WHICH WANTED TO USE HONG KONG AS A PRECEDENT FOR SETTLING TAIWAN AND BELIEVED THE TAIWANESE MIGHT BE WILLING TO REACH AN ACCOMMODATION WITH CHINA IF THE DEAL INCLUDED SEPARATE CP STATUS IN GATT. FOR THIS REASON, BOTH THE EC AND US HAD TO EXAMINE ALL THE IMPLICATIONS OF SEPARATE GATT CP STATUS CAREFULLY.
(3) THE CHINESE MIGHT BE WILLING TO USE MACAC AS A STALKING HORSE.
(SEE PARAGRAPH 2 ABOVE).
(4) IN VIEW OF THESE MAJOR CONSIDERATIONS, THE UK WOULD BE WELL
ADVISED TO SLOW UP THE PACE AND CONCENTRATE UPON BRINGING THE US
NEW AND ABOVE ALL ITS EC PARTNERS ON BOARD (AUSTRALIA, CANADA, ZEALAND AND JAPAN MUST BE HANDLED GINGERLY ON ACCOUNT OF THEIR DESIRE TO BE ON GOOD TERMS WITH THE CHINESE AT ALL COSTS AS EXEMPLIFIED AT THE RECENT CATT CPS MEETING).
(5) TRAN'S STRONG ADVICE WAS THAT IT WOULD BE EASIER TO REACH EC
AGREEMENT AT THIS STAGE BEFORE CONCRETE ECONOMIC INTERESTS WERE AT ISSUE. THIS WOULD BE BETTER DONE ON THE POLITICAL/DIPLOMATIC RATHER THAN THE TECHNICAL GATT NET, EG POLITICAL COOPERATION.
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