TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 92

PARTICIPATION IN THE GATT

HONG KONG'S PRESENT STATUS

:

4.

HONG KONG DERIVES ITS GATT RIGHTS AND OBLIGATIONS FROM ITS

POSITION AS A DEPENDENT TERRITORY OF THE UNITED KINGDOM WHICH

ACCEPTED THE GATT ALSO IN RESPECT OF TERRITORIES FOR WHICH IT

HAS INTERNATIONAL RESPONSIBILITY. HONG KONG'S CURRENT (NEXT TWO

WORDS UNDERLINED) DE FACTO STATUS IN THE GATT WILL THEREFORE CEASE

TO EXIST AFTER 30 JUNE 1997 FOLLOWING THE CHANGE OF SOVEREIGNTY

UNLESS SOME MEANS COULD BE FOUND TO TRANSMIT SUCH STATUS TO THE

SAR.

5. CHINA IS NOT CURRENTLY A MEMBER OF THE GATT BUT IS ATTENDING

ITS MEETINGS AS AN OBSERVER. IT IS UNDERSTOOD THAT CHINA IS

ACTIVELY PURSUING THE QUESTION OF ITS GATT MEMBERSHIP AND HAS

INDICATED ON A NUMBER OF OCCASIONS THAT, AS A FOUNDER MEMBER,

IT WOULD BE SEEKING TO RESUME ITS MEMBERSHIP. IRRESPECTIVE OF HOW

CHINA WOULD EVENTUALLY PROCEED TO SEEK ACCESSION TO THE GATT, IT

IS BELIEVED TO BE THE OPINION OF SOME DEVELOPED COUNTRIES THAT

CHINA WOULD HAVE TO PAY' IN THE SENSE OF NEGOTIATING ENTRY AND

ACCEPTING THE CONDITIONS APPROPRIATE TO ENTRY. NEGOTIATIONS OVER

CHINESE ACCESSION WOULD LIKELY TO BE LONG DRAWN OUT AND COULD TAKE

ANYTHING UP TO 8 YEARS. HOWEVER, CHINA'S POSITION IN GATT IS

LIKELY TO COME TO A HEAD IN ABOUT TWO OR THREE YEARS' TIME WHEN

THE CONTRACTING PARTIES WOULD PROBABLY WISH TO REVIEW CHINA'S

OBSERVER STATUS HAVING REGARD TO THEIR GENERALLY HELD VIEW THAT

THERE SHOULD BE A TIME LIMIT ON SUCH STATUS.

POSSIBLE OPTIONS FOR CONTINUED PARTICIPATION

6. THERE ARE, IN ESSENCE, THREE BASIC OPTIONS FOR HONG KONG'S

CONTINUED PARTICIPATION IN THE GATT. THESE ARE:

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

OPTION 3

HONG KONG TO SEEK TO ACCEDE TO THE GATT ON TERMS TO

BE AGREED WITH THE CONTRACTING PARTIES IN ACCORDANCE

WITH GATT ARTICLE XXXI:

PRIOR TO JUNE 1997, HMG DECLARES IN ACCORDANCE WITH

GATT ARTICLE XXVI 5(C) THAT HONG KONG POSSESSES FULL

AUTONOMY IN THE CONDUCT OF ITS EXTERNAL COMMERCIAL

RELATIONS WHEREUPON HONG KONG WILL BE DEEMED TO BE

A CONTRACTING PARTY.

CONFIDENTIAL

LASSESSMENT