CONFIDENTIAL
HONG KONG, ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) AND ASIA-PACIFIC ECONOMIC COOPERATION
(APEC)
1.
The prospects for Hong Kong to become a member of OECD and APEC presently appear remote, but not impossible. Problems mainly lie with possible adverse reaction from China. Membership of OECD may be further complicated by legal obstacles. But if Chinese sensitivities can be overcome a way forward might be in seeking some form of limited association with the OECD.
OECD
2.
The question of Hong Kong becoming a member of OECD is a difficult one, both from the legal and political aspects. The possibility of some relationship was first discussed about 18 months ago, although the Hong Kong Government were then, and probably still are, concerned first to press ahead with their desire to join APEC.
3.
Membership of Hong Kong would seem a logical conclusion in the context of increasing OECD dialogue with the other dynamic Asian economies. The degree of openness of Hong Kong's economy suggests they could fairly easily fall into step with the way the OECD is presently run. If a liberal economic and trade climate were the main criterion for membership, Hong Kong would have a better claim than a number of existing members. The attraction to Hong Kong of an OECD relationship would however probably be entirely limited to the additional anchor that would provide after 1997. But Hong Kong might well find it hard to cover OECD activities adequately within limited manpower resources.
4.
In the strict legal interpretation of the Convention setting up the OECD, there is considerable doubt that Hong Kong could become a full member in its own right. Neither would it be acceptable to extend the Convention to cover Hong Kong under the umbrella of UK membership as is presently being pursued UK territories. The size of Hong Kong's economy precludes such a course although we are seeking to clarify the strict legal position. (Even if this were possible, such an arrangement would presumably have to cease after 1997). If Hong Kong decided to apply for full membership in its own right, it would seem that success would hinge on interpretation of Article 16 of the OECD Convention which states "That [OECD] Council may decide to invite any Government prepared to assume the obligations of membership to acceed to this Convention".
OECD would
SG2AAS
CONFIDENTIAL