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CONFIDENTIAL

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2.

TO GIVE EFFECT TO THESE PROVISIONS OF THE JOINT

DECLARATION, THE BRITISH AND CHINESE GOVERNMENTS HAVE NOW AGREED

THAT THEY WILL MAKE PARALLEL DECLARATIONS TO THE DIRECTOR-GENERAL

OF THE GATT. THE PURPOSE OF OUR PRESENT APPROACH IS TO GIVE

ADVANCE INFORMATION OF OUR INTENTIONS AND TO SEEK UNDERSTANDING

OF WHAT WE PROPOSE. THE PRC EMBASSY WILL BE MAKING A SIMILAR

DEMARCHE.

3.

THE BRITISH DECLARATION WILL REFER TO THE DECLARATION

MADE BY THE UK ON 28 JUNE 1948 CONCERNING THE APPLICATION OF THE

GATT TO HONG KONG: DECLARE THAT HONG KONG, BEING A SEPARATE

CUSTOMS TERRITORY IN RESPECT OF WHICH THE UNITED KINGDOM HAS

ACCEPTED THAT AGREEMENT, POSSESSES FULL AUTONOMY IN THE CONDUCT

OF ITS EXTERNAL COMMERCIAL RELATIONS AND OF THE OTHER MATTERS

PROVIDED FOR IN THE AGREEMENT: AND DECLARE THAT IN ACCORDANCE

WITH ARTICLE XXVI(5) (C) OF THE GATT AND IN ACCORDANCE WITH THE

WISHES OF HONG KONG, HONG KONG WILL WITH IMMEDIATE EFFECT BE

DEEMED TO BE A CONTRACTING PARTY TO THE AGREEMENT.

4.

THE CHINESE DECLARATION WILL RECALL THE PROVISIONS IN THE

JOINT DECLARATION ACCORDING TO WHICH THE HONG KONG SAR OF CHINA

WILL DECIDE ITS ECONOMIC AND TRADE POLICIES ON ITS OWN. IT WILL

GO ON TO DECLARE THAT AS FROM 1 JULY 1997 THE HONG KONG SAR WILL

MEET THE REQUIREMENTS FOR A CUSTOMS TERRITORY TO BE DEEMED TO BE

A CONTRACTING PARTY AS PRESCRIBED IN GATT ARTICLE XXVI(5)(C), AND

THEREFORE MAY, USING THE NAME OF 'HONG KONG, CHINA', CONTINUE TO

BE DEEMED TO BE A CONTRACTING PARTY TO THE GATT.

5.

THE BRITISH AND CHINESE GOVERNMENTS ARE CONFIDENT THAT

THIS PROCEDURE IS FULLY IN ACCORDANCE WITH THE PROVISIONS OF THE

GATT. THIS HAS BEEN CONFIRMED BY INFORMAL ADVICE FROM THE GATT

SECRETARIAT.

6.

THE BRITISH GOVERNMENT HOPE THAT THESE DECLARATIONS WILL

MEET WITH THE UNDERSTANDING OF ALL CONTRACTING PARTIES. THERE

WAS WIDESPREAD INTERNATIONAL SUPPORT FOR THE JOINT DECLARATION

AND THE PROVISION FOR HONG KONG'S FUTURE, INCLUDING THE ABILITY

OF THE HONG KONG SAR TO DECIDE ITS OWN ECONOMIC AND TRADE

POLICIES. WE HOPE THAT THERE WILL BE A SIMILAR DEGREE OF

UNDERSTANDING FOR THE JOINT ACTION BY THE BRITISH AND CHINESE

/GOVERNMENTS

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CONFIDENTIAL

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