TNAG-0345-FCO40-381-UK-and-Hong-Kong-talks-on-cotton-textiles-1972 — Page 143

Mr Bott

Bottomley

15)

CONFIDENTIAL

14

In connection with Sir L Monson's minute, you may care

to see the attached exchange of minutes on the legal aspects

of discrimination in favour of Hong Kong.

2. Mr Wood's two minutes are by no means easy to follow, but

I think the position may be summed up as follows:-

but not

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3.

(a)

We have accepted GATT obligations in relation

to Hong Kong under Article XXVI 5(a).

Article XXIV accordingly requires that for

purposes of the territorial application of

the Agreement, Hong Kong should be treated,

X in relation to other contracting parties, as though it were a separate contracting party, though it does not acquire rights or

obligations vis-à-vis the UK.

(b) Consequently we are not allowed to discriminate

between Hong Kong and other GATT contracting

parties in relation to tariffs (Article I) or

quotas (Article XIII

If the Long Term Agreement on cotton textiles can be regarded as overriding the more general GATT obligation, we might perhaps be able to make exceptions for Hong Kong on the basis that the LTA requires us only to administer restrictions "in an equitable manner and with due regard to the special needs and situation of the less developed countries."

CONFIDENTIA

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