TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 34

PARTICIPATION IN THE GATT

HONG KONG'S PRESENT STATUS

CONFIDENTIAL

its

4. Hong Kong derives its GATT rights and obligations from

status as a Dependent Territory of the United Kingdom. The UK has

accepted the GATT in respect of territories for which it has

international responsibility. As a result of the change of

sovereignty on I July 1997, Hong Kong's status in the GATT will

cease unless some means c an be found to transmit such status to the

SAR.

CHINA'S PRESENT STATUS

5.

China is not currently a member of the GATT. However, she

attends GATT meetings as an observer and has announced her intention

of applying, eventually, for full GATT membership. Irrespective of

the method by which China might eventually seek accession to the

GATT, it is believed that s ome developed countries would take

take the

line that China's accession would have to be on terms which

satisfactorily mitigated the economic disadvantages of her participation. Negotiations would be likely to be long drawn out.

POSSIBLE OPTIONS FOR HONG KONG'S CONTINUED PARTICIPATION IN THE GATT

6. There are in essence, three basic options:

OPTION 1 Hong Kong to maintain the status quo until 1997 when

China, as the metropolitan power, would accept the GATT in

respect of Hong Kong as a territory for which it has international responsibility;

OPTION

2 Hong Kong to seek to accede to the GATT on terms to be

agreed with the Contracting

GATT Article XXXIII;

Parties in accordance

with

CONFIDENTIAL