Encl. IIa
Notes for Sir Edward Youde
on the GATT, the MFA and the UNCTAD
Hong Kong and the GATT
By virtue of the UK's acceptance of the GATT on behalf of Hong Kong and by virtue of Hong Kong's status as a separate territory, Hong Kong is treated in the GATT as though it were a contracting party.
2.
Hong Kong is formally represented in the GATT by the UK acting or speaking on behalf of Hong Kong. In practice, since the UK entered the EEC in 1973 (and hence had to be represented by the Community's spokesman), the "UK representative speaking on behalf of Hong Kong" in GATT meetings has invariably been a representative of the Hong Kong Government. This spokesman receives his instructions from Hong Kong and is able to adopt po- sitions separate from, and if necessary contrary to, those of the EEC.
Hong Kong and the Developing Countries in the GATT
3.
Unlike the UNCTAD, the GATT does not operate on the basis of a group system. The GATT prides itself on its ability to operate on the basis of consensus and without the sort of North/ South confrontation often to be found in the UN system.
4.
Nevertheless, many developing countries (LDCs) regard the GATT as a rich man's club and it is true that very often the LDCs have interests which do not coincide with those of the developed countries. The LDCs therefore find it useful even in the GATT to have an informal and loose form of coor- dination among themselves. They call themselves the Informal Group of Developing Countries in the GATT and meet frequently to exchange views, to coordinate their positions on issues of common interest and to seek each others' support on issues affecting individual LDCs.
5.
In recent years, Hong Kong has been accepted as a member of this group. Hong Kong's decision to participate in this group was the result of the realisation that, as an export-oriented territory faced with increasing protectionism in its major markets in the developed countries, Hong Kong's interests in the field of external commercial policy are more similar to those of the LDCs than those of the developed countries, and that, given its lack of political and economic power, Hong Kong is more likely to be able to influence events in its favour by acting in concert with like-minded LDCs than by acting on its
6.
However, Hong Kong's acceptance by the other LDCs was not achieved without difficulty. Hong Kong representatives have had .to overcome the other LDCs' instinctive dislike for a colonial government, their jealousy of Hong Kong's economic success and their suspicions that Hong Kong was a UK Trojan horse in the deve- loping camp.
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