CONFIDENTIAL

5.

The Embassy in

in Washington will very shortly be making an

approach to the State Department. They had hoped to make a parallel approach to the Office of the US Trade Representative. However, in the absence of the most senior members of that office abroad they

have suggested that the approach might instead be made by

Mrs Chalker to the Deputy of the Office.

6.

On

The Embassy had already given Smith a preliminary briefing on Hong Kong and the GATT, shortly after the agreement with the Chinese / had been reached. A copy of the reporting telegram is attached.

that occasion Smith suggested that

suggested that the US Government

the US Government might have a

problem over offering any commitment about separate contracting party status for Hong Kong after 1997. Any public statement to this effect would be extremely damaging, and would seriously undermine

confidence in Hong Kong and elsewhere in the arrangements agreed

with the Chinese. Smith is aware of this. However, as we are of

the view that approval of GATT members is not necessary for the step

we are taking, for the moment all that is required is acquiescence. Expressions of support, while welcome, are not necessary and there is nothing we are seeking from the Americans by way of a positive

reaction.

CONFIDENTIAL

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