into force, will address themselves - and we shall be seeking Chinese support in the JLG for our objective of securing contracting party status for Hong Kong within the GATT before 1997. Any action on our part, however inconspicuous, to head off a Chinese application for GATT membership, would put this at risk. It would also jeopardise our more general interests in China, where any attempt to obstruct accession to the GATT will be seen
a rebuff for their "open door" policy. These arguments lay behind the reference in our earlier paper to the essential importance of no blame attaching to Britain, in the event of an unsuccessful Chinese application to join the GATT. Therefore we cannot afford to run the risk of being seen to be working actively to frustrate Chinese membership. I have no doubt that our Ministers would be seriously concerned by any suggestion that we should do so.
7. Serious though the point is, I believe that in practice it amounts to only a minor difference about tactics. Politically we would of course be happy to see us arguing in favour of GATT membership. But given your economic doubts, we can agree that, in discussions in trade policy fora, we should indicate that we share the doubts of others who express them. We would however not want to be seen to be more active than that. In effect I agree with the argument put forward by Richard Wells in his letter to Brian Crowe of 19 October 1983 that we should draw attention to the potential problems with an eye to securing satisfactory terms for Chinese membership of the GATT, rather than to use the economic difficulties as an argument against allowing her to join. In other words we continue to think that action to mitigate the economic disadvantages of China's participation in the GATT, rather than opposition to her joining, is the course to pursue not least because it is clear that a determined Chinese application could not in any event be resisted.
8.
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You asked about the legal position. Our legal advisers agree that, since Nationalist China formally withdrew from the GATT in 1950, the People's Republic would not simply be able to take up the empty seat without making a fresh application.
9.
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Key
count_ox
There are no plans for discussion in the near future at the Article 113 Committee and the Chinese may want to consider their experience as observers a little longer, before deciding how hard to press for eventual membership. The Commission do not seem keen to ventilate the issue - nor indeed do other Member States appear as focussed on the matter as we are. I hope we can use the time available to reach agreement on tactics. As an aid to that process I enclose a revised and expanded version of our November draft. I hope, it meets your main concerns. I should be grateful for comments from you and copy recipients. If you or they think further discussion would be useful, it might be useful to air the issues interdepartmentally, e.g. subject to Michael Jay's views, in EQS when it takes the DTI's paper on Japan, possibly in
mid-May.
eve
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J A Shepherd
European Community Department
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