CONFIDENTIAL
2.
(iii)
鲞
Britain had G.A.T.T. relationships with the Six.
It was necessary to establish what would be Hong Kong's
position as regards the enlarged Community if Britain entered.
Would the position be affected when the Community developed
from its present limited stage of being a Customs Union, having six Members cach with separate arrangements and
interpretations within the G.A.T.T., to being a full economic
union with a common external trade policy? Britain might then
find herself, as the metropolitan power, making a complaint
on behalf of Hong Kong against a Community of which she was
a member. Legally it could be argued that a completed
economic union must become a single Contracting Party to the
G.A.T.T. If that happened, and if Britain were a member
of the unit which became a single Contracting Party, might
this mean that Hong Kong's absence of G.A.T.T. rights vis-a-vis Britain would be assimilated to the single Contracting Party, effectively wiping out her rights as far as a large segnent
of her markets was concerned?
3.
Mr. Muir said that during the previous year the question
of Hong Kong's G.A.T.T. status had been discussed with the
Foreign Office Legal Advisers. They had given it as their opinion
that Hong Kong was not administratively and juridically a Contracting Party to the G.A.T. T. although by virtue of the terri-
torial application provisions of the Agreement she was treated as a Contracting Party as far as the substantive trade rules of
the Agreement were concerned. He agreed that there was the
hypothetical danger Mr. Haddon-Cave had referred to of the Community becoming a single Contracting Party; but he knew of no inherent reason why individual states comprising a Customs Union had to form a single Contracting Party even though they might effectively act together as one in the G.A.T.T. Such an evolution towards single Contracting Party status was
CONFIDENTIAL
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