2

question specific Branches,

subjects

which

(your paragraph 5) has not so far yielded any proposals, although САВ, together with other is still considering whether there are other (particularly in the economic and commercial field) on

an agreement could be of benefit to Hong Kong.

In this connection, it occurred to us that JD 25 could provide a useful basis on which to peg any approach to the Chinese side in the JLG. I will let you know of our further thoughts on this as soon as our consideration is complete.

Mechanisms

4.

We

were grateful for your thoughts on this question.

We are reluctant to accept (at least at this stage) that the choice of options is quite as stark as suggested in paragraph 8 of your letter. It seems to us that our first choice should be to seek to persuade the Chinese that we should proceed along lines similar to those followed for other countries i.e. the UK negotiates an agreement with the HKG with submission of the initialled agreement to the Chinese side for endorsement through the JLG.

content, the Chinese side in the JLG would undertake to authorise the HKSAR Government to sign the initialled agreement on 1 July 1997. This is what I had in mind when making the suggestions I did in paragraphs 3 and 4 of my letter to you of 16 September last year.

5.

If

As I said there, the main difference between UK agreements and others would, of course, be that UK agreements could not be signed or enter into force until 1 July 1997. Such agreements would also have to adhere very closely to the model texts negotiated with the Chinese side although, in our view, it would be entirely defensible to seek some of the variations which have become standard and accepted by the Chinese side in relation to other States and to

make adjustments to deal with particular aspects of UK law

or technical policy requirements. In this connection, we note your concern about the need for a no re-surrender

provision in

any UK/HKSARG extradition agreement. Such a provision has, as you know, been accepted by the Chinese side in the Netherlands Agreement and appears in the other three agreements So far can persuade the Chinese side on the principle of endorsing agreements negotiated between the UK and the HKG, we are, therefore, confident that there would not be too much difficulty in getting the variations we will need.

initialled.

Provided

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6.

take

the

We fully recognise that the Chinese side may well view that HKG cannot represent the future HKSARG in any negotiations with the UK as the current sovereign power.

We also recognise that the difficulty in this respect would be particularly acute in the case of an Air Services Agreement (ASA) where the problem would not be the ASA itself but the underlying 'commercial' deal set out in the Confidential Memorandum of Understanding. We accept that there may be a case for a different approach here. However, in the first instance, we believe we must at least try for a solution that will place Hong Kong in as good a position vis a vis the UK after 30 June 1997 as other States, and vice versa.

7.

Chinese objections could, in our view, be reasonably refuted by the argument that the UK does not expect a better deal than those already negotiated at arms length with other States. The Chinese side will, in any event, have an opportunity to vet such agreements before signature. Such agreements will not be signed or enter into force until 1 July 1997 but the fact (which would become known) that the UK and China have reached agreement through the JLG on the various subjects will provide a useful boost to confidence. Indeed, for the UK to seek any other solution would appear odd given our insistence that such agreements are an important ingredient for maintaining and preserving Hong Kong's prosperity and stability.

Timing

8

·

first

Timing in

need

to

be

We

our view needs careful thought.

clear about our Own objectives. Thereafter there are some advantages in proceeding as quickly as possible, since the existence of draft agreements ready to be signed in these matters would be generally beneficial to confidence. However there are also strong arguments for postponing our approach to the Chinese. They are almost bound to take the view that HKG cannot represent Hong Kong in negotiations with the British Government. Moreover in present circumstances they are very likely to try to use the UK's wish to have these agreements as a means of exerting leverage over us.

9.

It is possible that these risks will diminish over time. By 1995 or so the political and constitutional position will have clarified considerably: the likely shape of the future SAR administration should be a lot clearer, and it may by then be more difficult for the Chinese to claim to represent their views. Chinese need for leverage over us may have diminished.

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10.

be best

between

texts,

two.

11.

In the

light of this we wonder whether it might for the time being to concentrate on working out us what agreements there should be and negotiating postponing an approach to the Chinese for a year or

I shall, of course, be in London for JLG XXIV and, if you thought it useful, would be very ready to discuss this further with those concerned. If you agree generally with our various tentative conclusions, we could exchange some ideas as to how and when we could start negotiations on the various subjects.

бакну

Joarre Focks

P.P. (D M Edwards)

Law Officer

(International Law)

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