TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 35

OPTION

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3. Prior to June 1997, HMG would declare, in accordance with

GATT Article XXVI 5(c) that Hong Kong possesses full

autonomy in the conduct of its external commercial

relations and may be deemed to be a full Contracting

Party.

(See also paragraph 15 below).

ASSESSMENT

7. Option 1 could not be exercised until the change of sovereignty

had taken place in 1997. It would also depend on whether China had

by then become a member of

of the GATT. At the present time

time it is

impossible to say with certainty that she will have done so.

8. As for Option 2, GATT Article XXXIII in theory permits either

the UK acting before 30 June 1997 or China thereafter to accede afresh to the GATT on Hong Kong's behalf. However, legal experts in

the GATT Secretariat have advised that recourse to Article XXXIII in

practice reflects a procedure normally used by independent sovereign states who have had no previous connection with the GATT. Article

XXXIII has only once been used a by Dependent Territory attaining

independence. This was Tunisia in whose favour France had already

made a Declaration under Article XXVI 5(c). Tunisia ignored this and proceeded instead under Article XXXIII apparently because the

Tunisian Government did not wish to continue wi th

the tariff

concessions which France had previously negotiated on its behalf. No such..comederations would apply in Hong Kong's case, and, unless there were other good reasons for doing so it would seem pointless to put the views of the GATT legal experts to the test.

which

-

9. In addition a two-thirds majority of the Contracting Parties is

needed for accession to the GATT under Article XXXIII. Even

assuming that general sympathy towards Hong Kong would secure such a

majority (and there must be doubts about this), the necessary

negotiations would take ti me and might not secure the desired

This could undermine confidence

Hong Kong's future.

to embark

action under Article

result.

Furthermore, if Hong Kong were

in

on

CONFIDENTIAL