TNAG-1242-FCO40-1555-Future-of-Hong-Kong-1983 — Page 125

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AND COULD CONCEIVABLY FIT WITH SOME HONG KONG ARRANGEMENTS. 3. HONG KONG IS WITHIN GATT AS A RESULT OF ITS CONNEXION WITH

THE UK. THE UK APPLIED THE AGREEMENT TO HONG KONG UNDER ARTICLE XXVI.5(A) ON THE BASIS OF THE UK'S 'INTERNATIONAL RESPONSIBILITY' FOR HONG KONG. ON A TRANSFER OF SOVEREIGNTY TO CHINA THE UK

WILL CEASE TO HAVE SUCH RESPONSIBILITY. RESPONSIBILITY FOR

EXTERNAL AFFAIRS AS SUCH DOES NOT AMOUNT TO INTERNATIONAL

RESPONSIBILITY. THE RESULT WOULD BE THAT ON A TRANSFER OF

SOVEREIGNTY THE PRESENT BASIS FOR HONG KONG'S PARTICIPATION IN

GATT WOULD CEASE, AND A NEW BASIS WOULD HAVE TO BE NEGOTIATED.

THEREFORE, ANY ARRANGEMENT BETWEEN THE UK AND CHINA AS CONSIDERED IN PARA 1. ABOVE WOULD BE SUBJECT TO THE SCRUTINY

OF THE GATT ON AN APPLICATION BY THE UK FOR HONG KONG PARTICIPATION.

AS A RESULT THE APPLICATION WOULD BE SUBJECT TO THE COMMERCIAL

WISHES OF THOSE PARTIES, INCLUDING THEIR POSSIBLE HOSTILITY. 4. HONG KONG HAS NO SPECIAL RELATIONSHIP WITH THE EC. ITS

EXPORTS PAY THE COMMON COMMERCIAL TARIFF. IT IS INCLUDED IN REGULATION 288/82 WITH THIRD COUNTRIES OTHER THAN THE STATE

TRADING COUNTRIES AND CHINA. EXPORTS FROM CHINA ARE

GOVERNED BY REGULATION 1766/82.

WE MIGHT WISH TO MAINTAIN THIS

POSITION RATHER THAN ALLOW HONG KONG IT TO BE GIVEN TREATMENT AS PART OF CHINA. BUT SUCH A MAINTENANCE OF POSITION COULD BE DECIDED

BY THE EC COUNCIL, IF CHINA DID NOT INSIST THAT IT WAS PART

OF CHINA.

5. IN VIEW OF THE ABOVE IT WOULD APPEAR THAT MUCH GREATER STUDY

OF THIS IS NECESSARY BEFORE WE PLACE TOO MUCH RELIANCE ON THE GATT

LINK AS AN ARGUMENT FOR RETAINING ADMINISTRATIVE RESPONSIBILITY.

SOME GATT MEMBERS MAY ARGUE THAT THE LINK MAY BE BROKEN BY A

CHANGE OF SOVEREIGNTY. A PREMATURE STATEMENT TO SUCH EFFECT MAY

WELL INVITE THE CHINESE ENQUIRY AS TO WHETHER OUR GATT PARTNERS

WOULD WELCOME SUCH AN ARRANGEMENT.

6.

IN THE MEANTIME, IT IS USEFUL TO RECALL THAT CHINA IN 1947

WAS A SIGNATORY TO THE GATT AGREEMENT PROVISIONAL PROTOCOL.

HOWE

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