2. DE FONBLANQUE REPEATEDLY EMPHASISED THE CRUCIAL IMPORTANCE
OF THE MAINTENANCE OF CONFIDENCE AND HENCE PROSPERITY IN HONG
KONG OF HONG KONG'S CONTRACTING PARTY STATUS AND THE AVOIDANCE OF CONTROVERSY ABOUT IT IN THE GATT. ABHYANKAR TOOK NOTE.
3. WHILE INDIAN REFLECTION ON THIS SUBJECT CLEARLY IS STILL AT AN EARLY STAGE, THERE WAS NO INDICATION OF A WILLINGNESS TO BE HELPFUL. IT WOULD NOT BE SURPRISING IF THEY DECIDE
TO MAKE THE MOST OF THEIR WORRIES BOTH ABOUT THE CORRECTNESS OF
THE PROCEDURE FOLLOWED AND ABOUT THE SUBSTANTIVE POSITION POST
1997. THIS WILL NO DOUBT DEPEND ON THE ADVICE THEY GET FROM GENEVA ABOUT THE PROCEDURAL POSITION. SUBJECT TO YOUR VIEWS, WE
SHOULD SEE ADVANTAGE IN PUTTING THE RECORD STRAIGHT WITH THE
INDIANS ON THE POINTS MADE BY ABHYANKAR IN RELATION TO THE
SITUATION AFTER 1997. THE OBVIOUS POINTS WHICH OCCUR TO US ARE
THAT:-
(A) THE CHINESE DECLARATION IN RELATION TO THE GATT STATUS OF
HONG KONG AFTER 1997 TAKES AS ITS STARTING POINT THE ASSUMPTION
THAT THE PROVISIONS OF THE JOINT DECLARATION IN RELATION TO THE
HONG KONG SAR WILL BE IMPLEMENTED IN GOOD FAITH BY ALL CONCERNED:
(B) THE PROPOSED ARRANGEMENTS POST 1997 THUS DO NO MORE THAN
MAINTAIN THE STATUS QUO ARISING FROM HONG KONG'S BECOMING A
SEPARATE CONTRACTING PARTY IN ITS OWN RIGHT TO WHICH THE INDIANS
APPEAR TO HAVE NO OBJECTION:
(C) THERE IS NO REASON WHATEVER TO ANTICIPATE ANY ABUSE OF HONG
KONG'S SEPARATE GATT STATUS AFTER 1997. THE NORMAL GATT RULES
SHOULD IN ANY CASE PROVIDE ADEQUATE SAFEGUARDS FOR THE INTERESTS
OF OTHER CONTRACTING PARTIES #F THEY HAVE REASON TO SUPPOSE THAT
ABUSE IN OCCURRING:
(D) NOBODY, THEREFORE, IS ASKING ANY CONTRACTING PARTY TO SIGN
AWAY ANY OF ITS NORMAL GATT RIGHTS IN RELATION TO HONG KONG FOR
THE PERIOD AFTER 1997.
(E) WHETHER OR NOT CHINA BECOMES A CONTRACTING PARTY IS IRRELEVANT,
AS THE HONG KONG SAR IS NOT PART OF CHINAS' CUSTOMS TERRITORY.
4. WE HAVE ALREADY MADE THESE POINTS ORALLY TO THE INDIANS, BUT
WE BELIEVE THAT THERE WOULD BE MERIT IN PUTTING THEM ON PAPER FOR
THE RECORD, TOGETHER WITH ANY OTHER (OR BETTER) ARGUMENTS YOU MAY
BE ABLE TO LET US HAVE.
WADE-GERY
HONG KONG AGREEMENT : RESTRICTED
LIMITED
HD/HKD
HD/FED
RESEARCH D (FE)
DEP/HD PUSD
PS/MR RENTCN MR WILSON
2
COPIES TO:
MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS
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