CONFIDENTIAL

(A) NAMING OUR OFFICE IN GENEVA THE HONG KONG ECONOMIC AND TRADE

MISSION:

(B) INFORMING THE CHINESE OF THE DECISION AND THE REASONS FOP IT:

(C) LEAVING IT TO THEM TO ARGUE WHY THE FORMULATION IN PARA. 4 OF SECTION VI OF ANNEX TO THE JOINT DECLARATION IS INAPPROPRIATE HAVING REGARD TO THE CURRENT FUNCTIONS OF OUR GENEVA OFFICE, AND PARTICULARLY AS THAT TITLE STRENGTHENS HONG KONG'S MIDDLE POSITION IN THE CURRENT ARGUMENT ABOUT SERVICES BETWEEN THE LDC HARDLINERS AND THE DEVELOPED COUNTRIES IN THE PREPCOM TO THE NEXT MTN ROUND.

6. ALTHOUGH WE ARE PLEASED AT THE RECEPTION GIVEN TO OUR DEBUT IN

PREPCOM (AS REPORTED IN UKMIS 238) WE DO NOT DISCOUNT THE POSSIBILITY OF BATISTA USING THE NEXT COUNCIL MEETING TO MAKE TROUBLE : AND IN THE LONGER TERM DOUBTS ABOUT HONG KONG'S SEPARATE GATT STATUS MAY BECOME MORE PRONOUNCED IN A NUMBER OF STATES AS 1997 APPROACHES (OF THE V.S FIRST REACTION). WE MUST GIVE NO GROUNDS FOR CHALLENGE, WHICH ENHANCES THE NEED FOR NOT GIVING ANY HMPRESSION THAT OUR

OFFICE IN GENEVA WILL FALL UNDER THE UMBRELLA OF THE CHINESE'' THAT IS WHAT THE DOUBTERS IN GATT ARE AFRAID OF.

YOUDE

HONG KONG AGREEMENT : RESTRICTED

LIMITED

HD/HKD

HD/FED

RESEARCH D (FE)

DEP/HD PUSD

PS/MR RENTON MR WILSON

COPIES TO:

MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS

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CONFIDENTIAL

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