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**MY OWN VIEW, AS EXPLAINED ABOVE, IS THAT SEPARATE GATT PREMISES WOULD NOT ENJOY INVIOLABILITY AT ALL. BUT HONG KONG

REPRESENTATIVES TO GATT WOULD BE ENTITLED TO CLAIM INVIOLABILITY FOR ALL PAPERS AND DOCUMENTS' (ARTICLE V OF THE AGREEMENT). HOWEVER, #| QUESTION WHETHER THERE WOULD BE LIKELY TO BE PRACTICAL PROBLEMS OVER PAPERS NOT RELATING TO GATT. MY GUESS IS THAT N PRACTICE THE SWISS WOULD, AS IT IS ARGUABLE THEY SHOULD, INTERPRET

ALL PAPERS AND DOCUMENTS' AS INCLUDING EVEN PRIVATE MAIL, AND THAT THEY WOULD BE UNLIKELY THEREFORE TO DIFFERENTIATE BETWEEN GATT PAPERS AND OTHER OFFICIAL PAPERS. IN SHORT, IF A HONG KONG REPRESENTATIVE SAID 'THESE ARE MY PAPERS AND DOCUMENTS'. THE SWISS MIGHT WELL IN PRACTICE REGARD THEM AS NVHOLABLE, WITHOUT MAKING ANY FURTHER INQUIRIES AS TO THEIR EXACT NATURE.'

5. WE TRUST THAT THIS ADVICE COUPLED WITH THE POINTS IN OUR TELNO 1399 WILL ENABLE YOU TO CONCLUDE THAT OUR PROPOSALS CAN NOW BE PUT

TO THE CHINESE.

YOUDE

HONG KONG AGREEMENT : RESTRICTED

LIMITED

HD/HKD

HD/FED

COPIES TO:

MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS

RESEARCH D (FE)

DEP/HD PUSD

PS/MR RENTON MR WILSON

-3.

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