GRS 630 CONFIDENTIAL
FM NEW DELH
TO PRIORITY FCO
TELNO 673
OF 0813OOZ MAY 86
CONFIDENTIAL
Ht 122/1
RECEIVED IN REGISTRY
19 MAY 1986
INFO PRIORITY UMIS GENEVA, HONEK KONICE BEKLING
INDEX
PA
REGISTRY
Aclios taken
314
335
YOUR TELNO 494 : HONG KONG AND THE GATT
HEAD OF CHANCERY TOOK ACTION ON 7 MAY WITH ABHYANKAR, HEAD
OF ECONOMIC DIVISION IN THE MINISTRY OF EXTERNAL AFFAIRS.
ABHYANKAR SAID THE MATTER WAS UNDER CONSIDERATION AND NO DECISION
HAD YET BEEN TAKEN ABOUT THE INDIAN POSITION. HE WAS AWAITING A
REPORT FROM SHUKLA, IN PARTICULAR ABOUT A STATEMENT WHICH HE
UNDERSTOOD THE DIRECTOR GENERAL HAD RECENTLY MADE ON THE SUBJECT.
HE DID NOT KNOW THE EXACT CONTENT OF THE STATEMENT BUT WAS
DOUBTFUL ABOUT ITS PROPRIETY AND THOUGHT THAT THE AGREEMENT OF
CONTRACTING PARTIES WOULD BE NECESSARY BEFORE ANY DECISION WAS
TAKEN OVER HONG KONG'S STATUS. NOR WAS HE CLEAR IN WHAT TERMS
THE ISSUE WOULD COME BEFORE THE 22 MAY COUNCIL UNTIL HE HAD
REPORTS FROM GENEVA ON THESE POINTS HE WAS UNABLE TO TAKE UP A
POSITION. IN ANY CASE #INDIA HAD ONLY RECENTLY STARTED TO CONSIDER THE IMPLICATIONS OF THIS PROBLEM. THEY HAD NOT REALISED THAT OUR PREVIOUS DEMARCHE (BROOMFIELD'S LETTER OF 17 APRIL) WOULD BE FOLLOWED SO RAPIDLY BY THE DECLARATHONS. HE WAS NOT GREATLY CONCERNED ABOUT THE CHANGE IN HONG KONG'S CURRENT STATUS AND ACCEPTED THAT HONG KONG ALREADY ACTED INDEPENDENTLY :IN PRACTICE (INDEED HE APPEARED AT ONE STAGE TO THINK THAT HONG KONG HAD BEEN A CONTRACTING PARTY UN MITS OWN RIGHT FOR SOME TIME.) HE WAS HOWEVER CONCERNED ABOUT THE IMPLICATIONS FOR THE PERIOD AFTER 1997. HE DID NOT THINK THAT THE CONTRACTING PARTIES COULD BE EXPECTED TO ANTICIPATE THE DECISIONS WHICH WOULD BE NEEDED N 1997 AS A RESULT OF THE CHANGE IN STATUS OF HONG KONG. THE *IMPLICATIONS OF THE SAR'S MEMBERSHIP, WHILE CHINA MIGHT OR MIGHT NOT BE A MEMBER AT THAT STAGE, WOULD NEED CAREFUL THOUGHT. HOW WOULD IT BE ABLE TO FULFILL ITS OBLIGATIONS? WHAT WAS TO PREVENT CHINA FROM GRABBING ITS QUOTAS?
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 HNDHAN 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 DECADE
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:-
CONFIDENTIAL