TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 60

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22 MAY 1985

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HONG KONG: GATT

1.

Mr Darwin Miss Wilmshurst

The papers now circulating concerning the proposed paper for EXCO on the position of Hong Kong in the GATT all start on the assumption that Hong Kong (which is a separate customs territory) possesses "full autonomy in the conduct of its external commercial relations and of the other matters provided for" in the GATT. However, whatever the "realities" of Hong Kong's past and present independence in its conduct of its external commercial relations, as a matter of law, ie of its constitution, Hong Kong is not self-governing, it has no Ministers or Ministerial system, the Governor can disregard the advice of his Executive Council and there is no representative legislature. At a separate level there is, apparently, no instrument of entrustment delegating authority to conduct any external commercial or other relations in respect of Hong Kong. In constitutional and formal terms, therefore, it is difficult to see how we can assert that Hong Kong has full autonomy in respect of matters set out in the GATT or indeed formal power to conduct external relations of any kind.

2.

It may be argued that the terms of Article XXVI.5 (c) of the GATT are such that the "declaration by the responsible party establishing ....." the fact that the non-metropolitan territory enjoys full autonomy is sufficient to create that autonomy. "Establishing" certainly could mean either creating or evidencing. But even if that argument suffices for the purposes of the GATT so as to provide the route to Hong Kong's separate membership, it leaves unresolved the constitutional issue. Is it open to Ministers to authorise the making of such a declaration if it does not in some way reflect the constitutional position?

3. Hong Kong has managed to get along so far with a rudimentary old fashioned constitution which ignores the fact that formally the Government is the Governor and the Governor is subject to the instructions of the Secretary of State. If we were to pursue the autonomy concept we would in effect be asserting that the Governor has autonomy in this sphere. That is not logically impossible, though it would be novel and the implications would need to be thoroughly explored. There are alternatives such as the establishment of some machinery of executive power in Hong Kong other than the Governor. We will have to come to that shortly. Perhaps we

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CONFIDENTIAL

/should

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