TNAG-0341-FCO40-377-Effects-on-Hong-Kong-of-long-term-policy-for-textiles-in-int-1972 — Page 6

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UNITED KINGDOM MISSION

37-39 rue de Vermont, 1202 GENEVA Telex: 22956

Telegrams: Prodrome, Geneva

Telephone: 34.38.00, 33.23.85

GE 6/2

R B Crowson Esq

27 July 1972

RECEIVED N REGISTRY No.51 - 2 AUG 19/2

NKK6/8

Hong Kong and Indian Ocean Department Foreign and Commonwealth Office London SW1

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Dear Courton,

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REF.

HONG KONG'S GATT RELATIONSHIP WITH THE ENLARGED EEC

1. Thank you for copying to me your letter of 5 July to Bill Nicoll in Brussels about the implications of EEC enlargement for Hong Kong's representation in the GATT. I am sorry to have over-run the fortnight's grace you gave us for replying.

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2. May I start by saying how much I agree with the unspoken premise of your letter, which is that the difficulty of agreeing with the Community a satisfactory arrangement for the representa- tion of Hong Kong will probably be much greater than that of getting the arrangement accepted in GATT. I can think of four possible ways in which representation for Hong Kong might be arranged and to only one of them - and that the least plausible does it seem likely that significant objections would be raised in GATT. is not to say that the subject is of no interest to anybody; certain developing countries, for example, which question Hong Kong's status as a "developing" territory (and therefore as a bene- ficiary under the Generalised Scheme of Preferences) might be happy enough to see her lose effective representation; but it is very unlikely that they would take an aggressive line on this given the strongly non-political and pragmatic atmosphere of the GATT, and hard to see any grounds on which such a line could be based. There would be more powerful favourable influences among those who see the necessity for a trading power of Hong Kong's importance to be properly represented she would be a far greater potential nuisance outside the GATT than inside.

3. However, this is all very general. What you have called the GATT angle would vary a little according to which of the several options available to us were adopted. I think the best way to answer the second of the two specific questions you addressed to me is there likely to be a GATT angle on the question of where Hong Kong sits and how she is referred to in Geneva is to look at each of these options in turn. Discussion of your first question will be easier when the options are clarified.

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