CONFIDENTIAL
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MDHIAN 4984
FOR DISCUSSION IN ACCORDANCE WITH THE AGREED GUIDELINES FOR CONSULTATION ON INTERNATIONAL RIGHTS AND OBLIGATIONS. ASHTON WENT BACK TO ZHU CHANGNIAN ON 25 NOVEMBER AND SAID WE WERE PUZZLED BY THE CHINESE POSITION AS WE ONLY INTENDED TO APPLY FOR OBSERVER STATUS WHICH WOULD NOT INVOLVE ANY IRO'S. AT ASHTON'S REQUEST, ZHU UNDERTOOK TO REPORT OUR CLARIFICATION URGENTLY BACK TO PEKING. ZHU REPORTED ON 26 NOVEMBER THAT PEKING'S POSITION HAD NOT CHANGED BUT DID NOT PROVIDE FURTHER EXPLANATION.
5. ZHU DID NOT ASK WHETHER OUR APPLICATION HAD ALREADY BEEN ISSUED AND WE DID NOT VOLUNTEER ANY INFORMATION ON THIS. OUR APPLICATION WAS, IN FACT, SUBMITTED ON 24 NOVEMBER, ALMOST SIMULTANEOUSLY WITH THE NCNA'S APPROACH TO US ON THE CHINESE POSITION. HOWEVER, WE SEE ADVANTAGE IN TAKING STEPS TO ENSURE THAT OUR APPLICATION IS NOT
PROCESSED FURTHER UNTIL WE HAVE CLARIFIED THE POSITION WITH THE CHINESE SIDE. WE HAVE THEREFORE INSTRUCTED OUR PERMANENT REPRESENTATIVE (GENEVA) TO REQUEST THE OECD SECRETARIAT (WITHOUT REVEALING THE REASON) FOLLOWING WORD UNDERLINED NOT TO PUT OUR APPLICATION ON THE AGENDA OF THE OECD COUNCIL MEETING UNTIL FURTHER
NOTICE FROM US.
WAY FORWARD
6. IN OUR VIEW, THE CHINESE REQUEST FOR CONSULTATION IN THE JLG HAS NO SUBSTANCE, GIVEN THAT OBSERVER STATUS DOES NOT INVOLVE ANY IROS AND THAT HONG KONG HAS BEEN PARTICIPATING IN THE OECD'S INFORMAL DIALOGUE WITH DYNAMIC ASIA (NOW RENAMED NON-MEMBER) ECONOMIES SINCE
1989.
7. HOWEVER, WE CONSIDER IT IS UNWISE FOR US TO IGNORE THE CHINESE REQUEST FOR CONSULTATION AND PROCEED UNILATERALLY :
PROVOKE THE CHINESE INTO SABOTAGING OUR APPLICATION PARTLY THROUGH
PUTTING PRESSURE ON THE OECD MEMBERS. SUBJECT TO YOUR VIEWS AND THAT OF UK DEL OECD AND PEKING, WE THINK THE BEST WAY FORWARD IS TO ASK THE OECD SECRETARIAT TO PUT ON HOLD OUR APPLICATION PENDING OUR DISCUSSIONS WITH THE CHINESE. IN PARALLEL, WE SHALL HAND OVER A SPEAKING NOTE SHORTLY VIA THE JLG CHANNEL, CONFIRMING OUR WILLINGNESS TO CONSULT THEM THROUGH THE JLG. WE WILL DO SO AT ITS WEEKLY INFORMAL MEETING. THE TEXT OF THE SPEAKING NOTE IS BEING FAXED SEPARATELY.
LINE TO TAKE
8. IN BRIEFING THE OECD COUNCIL AND THE OECD SECRETARIAT ON THE
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