CONFIDENTIAL
DSR 11C
frankly no guarantee that any trading relationship is
likely to flourish in a GATT
regulated open trading
system. That is not the way the GATT works. Our
priority must be to ensure that the balance between
rights and obligations is firmly struck. As
Alan Montgomery pointed out in his teleletter of
15 January, there is no reason to be unduly defeatist
about achieving this nor even perhaps (although I can
-
see that this would be a point of extreme political
sensitivity to the chinese) about the assumption that
China would automatically receive both state trading and
developing country status. We should, I think, be
examining the probability of Chinese membership against a
background of inevitable change in the GATT
particularly in view of a new round which is likely, in
addition to extending GATT disciplines and competence to
new areas of trade, to focus on the graduation of the
more prosperous and competitive developing countries away
from their GATT privileges.
·
5. In short while it would indeed be preferable if
China were not to accede to the GATT, I tend to 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
argument against allowing her to join.
an
CONFIDENTIAL
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