CONFIDENTIAL

012672 MDLIAN 7133

Hu13099/2

CONFIDENTIAL

FM UKDEL OECD PARIS

TO PRIORITY FCO

TELNO 66

OF 070715Z JUNE 90

INFO PRIORIT HONG KONG UKREP JLG HONG KONG PEKING

YOUR TELNO 1062 TO HONG KONG: OECD MEMBERSHIP

SUMMARY

1. DISCUSSION OF POSSIBLE OECD ENLARGEMENT NOW OUT OF THE CLOSET.

BUT POSSIBLE HONG KONG MEMBERSHIP RAISES SPECIFIC POLITICAL

PROBLEMS. LOWER LEVEL OF ASSOCIATION MAY REDUCE THESE.

RECOMMENDATION THAT HONG KONG OFFICIALS EXPLORE OPTIONS WITH UKDEL/

OECD.

DETAIL

2.

PARA 9 OF TUR PRECISELY IDENTIFIES THE THREE MAIN PROBLEMS

WHICH THE MEMBERSHIP WILL SEE IN ANY PROPOSAL THAT HONG KONG

SHOULD JOIN THE OECD.

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3. DISCUSSION AMONG MINISTERS AT LAST WEEK'S MINISTERIAL SUGGESTS

THAT THE OECD MEMBERSHIP IS NOW READY TO CONSIDER THE PRINCIPLE OF

ADMITTING NEW MEMBERS PROVIDED THAT THEY ACCEPT CERTAIN PRACTICAL

OBLIGATIONS AND THAT THEY CLEARLY SATISFY THE CRITERIA SET OUT IN THIS YEAR'S COMMUNIQUE PLURALIST DEMOCRACY, RESPECT FOR HUMAN RIGHTS AND A COMPETITIVE MARKET ECONOMY. (THE GENERALLY COOL

RESPONSE TO YUGOSLAVIA'S APPLICATION AT THE SAME MEETING STEMMED FROM THE FEELING THAT IT DID NOT YET MEET THESE CONDITIONS.)

NEVER- THELESS, NO-ONE SERIOUSLY DISSENTED FROM THE SECRETARY GENERAL'S SUGGESTION THAT SOME EASTERN EUROPEANS MIGHT QUALIFY WITHIN 3-5 YEARS. EVENTUAL MEMBERSHIP FOR CERTAIN DAES (ESPECIALLY KOREA)

IS ALSO MORE OR LESS ACCEPTED AS THE LOGICAL CONCLUSION OF THE CURRENT OECD/DAE DIALOGUE, THOUGH KOREA ITSELF SEEMS TO BE THINKING ONLY OF A DATE IN THE MID-NINETIES, AND THE THREE ASEAN DAES ARE STILL PLAYING SHY.

4. BUT WHILE THE GENERAL CONCEPT OF ENLARGEMENT IS NOW OUT OF THE

CLOSET, THE NARROW ISSUE OF HONG-KONG'S POSSIBLE MEMBERSHIP IS COLOURED BY SPECIFIC POLITICAL FACTORS, IN PARTICULAR BY THE

RELATIONSHIP WITH CHINA. IT IS OECD MEMBERS' VIEWS ON HOW THIS MIGHT

PLAY VIS A VIS PEKING THAT WOULD ULTIMATELY DECIDE THEIR RESPONSE TO

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CONFIDENTIAL

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