TNAG-0046-FCO40-82-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 13

CONFIDENTIAL

THE EFFECT OF U.K. ENTRY INTO THE E.E.C. ON HONG KONG RIGHTS UNDER THE GATT

13. Both Britain and the Six individually are contracting

parties to the GATT. The enlargement of the Community would not in itself change this. Hong Kong has GATT rights and obligations vis-a-vis the Six in virtue of the declaration made by Britain under Article XXVI as a metropolitan power, and we exercise Hong Kong's rights in the GATT on her behalf. Hong Kong as a British Dependent Territory does not have GATT rights and obligations vis-a-vis Britain, but it is possible that a unilateral declaration by Britain that we regard GATT rights and obligations as existing between

ourselves and Hong Kong would pass unchallenged.

14. None of this would weaken Hong Kong's legal position after British entry since Hong Kong's rights against the Six would effectively give her rights against the whole enlarged

But there is a practical problem over the exercise

Community.

of Hong Kong's rights. After entering, we could clearly not speak up in the GATT on Hong Kong's behalf against the policy of a Community of which we were a member, though we could, of course, bring strong pressure to bear on Hong Kong's

behalf within the Community machinery. Nevertheless, the Hong Kong authorities may well feel that it would be desirable,

as a long stop, for them to be able to exercise their GATT

rights directly without relying on Britain.

15. The simplest way of achieving this would be for Hong Kong

to be given her own voice in the GATT. She could achieve this

either by becoming a contracting party in her own rights, or

by having the GATT applied to her de facto. But both these

courses would require Britain to devolve on Hong Kong "full

autonomy in the conduct of her external economic relations".

This possibility has been investigated, but we agree with the

provisional Hong Kong view that the political objections

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CONFIDENTIAL

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