TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 72

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GRS 430

CONFIDENTIAL

CONFIDENTIAL

HKK 040/24

FM UKMIS GENEVA 08141OZ MAY 1985

TO PRIORITY FCO

TELNO 182 OF 8 MAY

INFO PRIORITY UKREP BRUSSELS, HONG KONG, PEKING, BRUSSELS

N12

OR WES)

WASHINGTON

to Coula'

No

Surely?. Dame A-in Caburtais teletter

I May, pana 3

YOUR TELNO 111: HONG KONG AND GATT

1. WE ARE OF COURSE CONTENT WITH THE LINE TAKEN IN THE DRAFT

EXCO PAPER AND CONSIDER THAT IN GENERAL IT PUTS THE CASE FOR

ACTION UNDER ARTICLE XXVI.5.(C) WELL. WE AGREE IT IS IMPORTANT

THAT THE MATTER SHOULD BE TACKLED AS SOON AS POSSIBLE AND DECOUPLED

FROM THE SEPARATE QUESTION OF CHINESE ACCESSION TO GATT.

2. THE FOLLOWING POINTS APPEAR TO US TO DESERVE SOME CLARIFICATION:

PARA, 4: SUGGEST DELETE DE FACTO'': HONG KONG CURRENTLY

ENJOYS FULL GATT RIGHTS AND OBLIGATIONS AS A RESULT OF UK ACCEPTANCE OF THE GENERAL AGREEMENT (ARTICLE XXVI.5(A)).

PARA.5: IT SEEMS INADVISABLE TO SUGGEST ANY SPECIFIC TIME-FRAME

FOR CHINESE ACCESSION WHICH CANNOT BE ESTIMATED WITH ANY PRECISION

(DG GATT RECENTLY SUGGESTED ONLY 2-3 YEARS MIGHT BE NECESSARY).

IN OUR VIEW NEGOTIATIONS COULD INDEED BE LONG DRAWN OUT, PARTICULARLY IF, AS SOME EXPERIENCED GATT WATCHERS BELIEVE, THEY BECOME INEXTRICABLY TIED UP WITH A NEW GATT ROUND.

PARA.6, OPTION 3: SUGGEST REWORDING TO READ

If THAT HONG

KONG POSSESSES FULL AUTONOMY IN THE CONDUCT OF ITS EXTERNAL

COMMERCIAL RELATIONS AND SHOULD BE DEEMED TO BE A FULL CONTRACTING

PARTY (IE DE FACIO STATUS). SEE ALSO PARAGRAPH 15 BELOW." PARA.9: WE SUGGEST OMITTING THIS PARAGRAPH WHICH MAKES AN

ARTIFICIAL DISTINCTION BETWEEN HONG KONG'S STATUS UNDER ARTICLE XXX111 AND ARTICLE XXVI.5.C. UNDER THE PROCEDURE OUTLINED IN PARAGRAPH 15, HONG KONG WOULD ACHIEVE DE FACTO STATUS UPON THE UK DECLARATION AT (A), BUT WOULD ACHIEVE DE JURE STATUS UPON MAKING ITS OWN DECLARATION AT (B). AS EXPLAINED IN MY TELELETTER

OF 11 MARCH, THIS IS THE PROCEDURE WHEREBY NEWLY INDEPENDENT

FORMER UK DEPENDENCIES (EG BELIZE) BECOME FULL CONTRACTING

PARTIES (CPS). IT IS INCORRECT THEREFORE TO SUGGEST THAT HONG

Cf. 51) Says The KONG WOULD NOT ENJOY FULL CP STATUS FOLLOWING THE PROCEDURE сать Senetaner home singserted 'could' for the de comates. This shornd

presumes

he

OUTLINED IN PARAGRAPH 15. IT IS UPON THIS PRESUMPTION, IE THAT HONG KONG WILL ENJOY FULL CP STATUS, THAT NO FURTHER

ACTION BY CHINA WOULD BE CALLED FOR AFTER 1997.

PARA.12(D) MIGHT BE STRENGTHENED BY OMITTING THE WORDS '

THERE IS REASON TO BELIEVE THAT

IN OUR VIEW THE LEGAL

POSITION WOULD BE CLEAR AND COULD ONLY BE ALTERED AS A RESULT

repected in the OF A DELIBERATE DECISION BY CHINA TO MODIFY HONG KONG'S STATUS

paper.

(WHICH WOULD BE A BREACH OF THE HONG KONG AGREEMENT).

CONFIDENTIAL

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