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4.
Following his visit to Washington and London in early May, McDonnell's next task is to present to the Chinese a paper on the modalities of an application to "resume" their GATT seat, and a draft application to GATT, with supporting documentation. This is in process of preparation now. McDonnell has apparently obtained three separate legal opinions to the effect that China has a right under international law to resume the GATT seat occupied by nationalist China. The argumentation appears to be based on the fact that when China resumed its UN seat, reference was made to Chinese resumption of its seat on subsidiary UN bodies. China was a member of the original preparatory committee for the ITO in the late 1940s, and it is, I understand, this body which formally continues to meet to discuss GATT matters the GATT being formally merely the Treaty signed by the contracting parties, including China. The argument therefore is that China is a signatory of GATT, and, because of the decision on UN membership, has a right to resume her seat. The distinction is made, however, between being a signatory of GATT, and assuming the obligations of the Treaty. McDonnell's advice is, therefore, that even if the Chinese resume their seat, they will still need to negotiate the resumption of GATT obligations with the contracting parties, and that in practice this will amount to the same thing as an Article XXXIII negotiation if China were to apply afresh. The Chinese have to accept that they need to not only bring their tariff in conformity with GATT obligations in 1950, but also to undertake the obligations negotiated in subsequent GATT rounds, and if necessary pay for the obligations which other contracting parties will have to them according to the outcome of these rounds. As McDonnell sees it, the principle of resuming their seat is very important to the Chinese politically, and it will in practice make very little difference to other contracting parties if they are allowed to do this, rather than being forced to undertake a fresh application which they might indeed not be prepared
to do.
5. McDonnell made the obvious point that the attitude of other contracting parties towards the Chinese would be very important to the latter. The Chinese would, for instance, probably take it very badly if they were not fully involved in the preparations for the new GATT round, including being invited to the Ministerial level meeting of contracting parties in September. If in these and other ways the Chinese were treated correctly, McDonnell's opinion was that they would be prepared to pay a realistic price for full GATT membership, and one which would be acceptable to major
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