TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 176

-8-

(c)

An Import Commitment:

20.

The commitment made by the East Europeans to increase

their imports by a specified value each year remained a dead letter and was in any case ill-conceived, since even in a communist state, the level of imports depends on more than merely the will of the Government. More meaningful would be a Chinese commitment not only to

eschew formal import barriers, but also that her

imports grew in some relationship with her exports or

with her economy.

Such a commitment could not be

absolute: but it could be provided that so long as it was observed the special safeguards at (a) and (b) above were in abeyance; in other words they could be invoked only if the import commitment was not fulfilled.

Something along the lines of (b) would probably be essential. Something on the lines of (c) could make (b) less sweeping. But without such measures the EC and the UK within it would be entering into yet another unequal trading relationship and assuming yet more unbalanced obligations. In time it would become apparent that the commercial implications of those obligations were such that they

could not be defended politically; or therefore fulfilled. And the dismantling of the GATT system would have taken another large step

forward.

21.

The Community therefore should press for the inclusion of (b), perhaps tempered by (c) in any Protocol of Chinese Accession. Failing this, the Community should invoke Article XXXV of the GATT, and decline to assume GATT obligations towards the new member, save as qualified by such provisions.

22.

If Chinese membership comes before the Article 113 Committee, the UK Titulaire should speak on the above lines.

Department of Trade and Industry

27 March 1985