TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 108

CONFIDENTIAL

CHINA AND THE GATT

INTRODUCTION

S

to

1. There are strong political arguments for the West

and particularly for Britain in the light of our

agreement with China over the future of Hong Kong

respond positively to China's wish to accede to the

GATT. But accommodating a state trading country of

China's size and economic potential into the GATT

framework would pose problems, which could prove

severe and offer few compensating advantages in the

trade field. It would also highlight the exclusion

from the GATT of the Soviet Union, whose accession we

shall continue to want to avoid.

2.

What should be our attitude?

FOREIGN POLICY ASPECTS

General

3. We do not know in any detail how individual GATT

contracting parties will view the prospect of Chinese

accession, and can at this stage offer only an informed

guess. Most western countries want to encourage and

consolidate China's movement towards greater

liberalisation and involvement in the international

system since the death of Mao, and it is long-standing

British policy to try to draw China into participation

in international organisations.

Accession to GATT

CONFIDENTIAL