CODE 18-77

Reference.....

3.

Before we approach the Chinese with a proposal that these amendments should be applied to Hong Kong, I would suggest that some thought might be required as to how the transfer of Hong Kong's obligations from the UK to China in 1997 will affect (a) Hong Kong, and (b) the UK. Are HK's emissions, targets etc calculated completely separately from those of the UK, or as part of one total? What proportion of the UK's financial obligations will the UK expect HK to bear, and how will these be affected by HK becoming part of a developing country? I imagine that we, together with HKG and the DoE, have some homework to do before putting together a proposal for the JLG.

4.

As far as legislation is concerned, HKG will need to have in place legislation equivalent to EEC Council Regulation No.594/91, which supercedes Reg No.3322/88. This is a substantial piece of legislation (10 pages). It will have implications for HK's economy and will certainly affect trade with other States and territories which are not parties to the amended Protocol, such as Taiwan. I imagine therefore it will take them some time to complete this exercise.

5. When you reply to Mr Hase, I suggest you enclose a copy of the complete text of the 1990 amendments and of Reg 594/91, and ask him to pass them to Mr Newell in case he does not have them. I should be grateful to see your letter in draft.

Will Shelly

Jill Barrett

JB3ABV

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