TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 195

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3.

CONTRACTING PARTY WHICH IT ACQUIRED UNDER ARTICLE XXVI(5)(C)

OF THE AGREEMENT. UNQUOTE.

THERE IS NO DOUBT THAT IF THIS PROCEDURE WERE TO BE FOLLOWED

HONG KONG WOULD, AS A RESULT OF THE UK'S DECLARATION, BECOME A CONTRACTING PARTY TO THE GATT. THE ADVANTAGE OF HAVING CHINA

MAKE A PARALLEL DECLARATION WITH RESPECT TO THE PERIOD AFTER 1 JULY 1997 WOULD BE THAT WE COULD BEGIN TO GAIN THE ACCEPTANCE (BY ACQUIESCENCE) OF ALL THE OTHER CONTRACTING PARTIES WITH REGARD TO THE PROPOSITION THAT HONG KONG (CHINA) WOULD REMAIN A CONTRACT-

ING PARTY AFTER 1997. IN THE UNLIKELY EVENT THAT OBJECTION SHOULD

BE TAKEN, THERE WILL STILL BE TIME BEFORE 1997 TO FIND SOME

ALTERNATIVE SOLUTION. THIS COULD TAKE THE FORM OF CHINA BECOMING ITSELF A CONTRACTING PARTY TO THE GATT AND MAKING AN APPROPRIATE

DECLARATION IN RESPECT OF HONG KONG (CHINA).

4.

ONE POSSIBLE RISK IN FOLLOWING THE ABOVE PROCEDURE IS THAT

THE CHINESE MAY BE TEMPTED TO MAINTAIN THAT ANY DECLARATION WHICH

THEY MAKE BEFORE 1997 MUST STILL ASSERT THE CHINESE PRESENT CLAIM

TO SOVEREIGNTY OVER HONG KONG. I THINK WE SHOULD IN, THAT EVENT

HAVE TO SEEK TO PERSUADE THEM THAT THIS WOULD DEFEAT THE WHOLE

EXERCISE. WE COULD NOT OURSELVES ACQUIESCE INSUCH A DECLARATION,

AND IF GATT WERE FORMALLY PUT ON NOTICE OF A DISPUTE AS ON THE

PRESENT STATUS OF HONG KONG THIS WOULD CALL INTO QUESTION THE EFFICACY OF ANY DECLARATION MADE TO THE DIRECTOR GENERAL BY EITHER

THE UNITED KINGDOM OR BY CHINA.

5. IF WE SUCCEEDED IN SECURING THE APPROPRIATE COOPERATION OF THE CHINESE, AND THE ACQUIESCENCE OF THE OTHER CONTRACTING PARTIES TO GATT THIS WOULD NOT PREVENT THE UNITED KINGDOM, ON SOME OCCASION AFTER 1997, AND IF CHINA WERE TO REPUDIATE ITS AGREEMENT, FROM SAYING THAT HONG KONG NO LONGER FULFILLED THE CRITERIA SPECIFIED IN ARTICLE XXVI(5)(C), AND THEREFORE NO LONGER DESERVED TO BE TREATED AS A CONTRACTING PARTY. THE FACT THAT WE WOULD HAVE THE

POWER TO DO THIS WOULD ENABLE US TO EXERT SOME PRESSURE ON CHINA AFTER 1997 NOT TO REPUDIATE THEIR AGREEMENT WITH THE UK. UNQUOTE.

HOWE

FUTURE OF HONG KONG

PLANNING STAFF

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D/ED/PUSD

́RES.B. (MR WALKER)

LEGAL ADVISER (SIR IAN SINCLAIR

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