TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 167

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INTERNATIONAL TRADE POLICY DIVISION M

DEPARTMENT OF TRADE AND INDUSTRY

HXK 04924 НКИ

1 VICTORIA STREET

LONDON SW1H OET

Еще PL waise with ECDE Rupiny

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(27)

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ECDCE) presumably Co-udinaing

145400/3

Telephone Direct Line

phone

Switchboard

01-215 01-215 7877

27 March 1985

24

11

R W Renwick CMG

ECD(E)

Foreign and Commonweath Office

London

SW1

Dear Renwick,

1)

بنات

M. Branthwaite

In Broadbent

în Elliott FED

Mr Galsworthy HKD

My Remwich

M Shyand.

2) Miss Evans

Mr Waren

Pr. consider, with Legal Advisen and FED/HKD.

A3 29.3

CHINA AND THE GATT

Brian Crowe wrote in November last, enclosing a paper on the possibil- ity of Chinese accession to the GATT. Since then, we here have been looking at the question in some detail and, having taken my Minister's mind, I now enclose a paper setting out this Department's view.

2. Our broad conclusion has not changed. Notwithstanding the political arguments, which we recognise, Chinals accession to the GATT would impose obligations on the UK which could be very costly to

British trade, for no visible commercial benefit, while adding to the already severe strains on the GATT system as a whole. If a Chinese application can be headed off, so much the better, and our view is that we should now begin discreetly to canvass this view, starting with the Commission (probably Leslie Fielding), then the wider Community and the US. We could expect a sympathetic hearing: apart from the intrinsic merits of our case, those who have in the past shown tendencies to acquiesce in a Chinese application will now hesitate in the light of the recent renewal of Russian overtures to a br weak the GATT. If China's membership became the precedent for all COMECON

joining, the GATT system as we now know it would simply cease to exist. Vide gop

The pity is that the incompatibility of this system with the member- tigues.

ship of State Trading Countries has not been faced from the start.

3% Nevertheless we accept that if China is determined to join, even in the face of Western opposition, she could not ultimately be prevented. So in parallel with a discreet lobbying exercise, we must begin to consider how to minimise the economic risks arising from Chinese accession. A first, vital point is to clarify the legal arguments for refusing any Chinese request to take up the place vacated by the Chinese Nationalist in 1950. We have touched on this in our paper, but your legal advisers will have views.

4. More generally, some carefully worked-out entry-terms would be needed; and the enclosed paper sets out the sort of terms that the UK might want the EC to apply to China, whether under any Protocol of Accession or under an Article XXXV derogation from such a Protocol.

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