SECRET
Regarding the GATT possibilities for HK in new situation, I drew attention to Article XXVI.5(c) according to which if a customs territory in respect of which the GATT has been accepted "possesses or acquires full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement, such territory shall, upon sponsorship through a declaration by the responsible contracting party establishing the above-mentioned fact, be deemed to be a contracting party". Note that full independent statehood is not required: Southern Rhodesia was deemed to be a CP before UDI on this basis. In recent years we have resisted pressure from HK for a more formally independent status in GATT not by arguing about whether they had ".....full autonomy in.....external commercial relations....."etc, but basically because we thought the PRC would object. In the context of a negotiation with the PRC about HK this option seems open and perhaps attractive.
In the light of this I attach some draft passages expanding the outline Annex. Depending on the evolution of the paper they could be supple- mented from this letter. They are only partial. Others are much
better qualified than I to tackle the implications of the EC/China agreement, for HK offices overseas, and to describe the conflicts over textile policy.
Yours sincerely
John Roadway
R J MEADWAY
cc A E Donald Esq CMG, FCO
R D Clift Esq HKGD FCO
R Kinchen Esq ECD(E)FCO
A R Rushford Esq CMG, Deputy LA, FCO
R Williams Esq ITP
T Muir Esq OT4/2
Miss A Brimelow ITP1
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