TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 94

11.

FOR ALL THESE REASONS OPTION 2 WOULD APPEAR TO MAKE HONG KONG HOSTAGE TO THOSE SEEKING ADVANTAGE AT OUR EXPENSE, AND SHOULD NOT BE PURSUED.

:

12. OPTION 3 IS LESS PROBLEMATIC AND BY FAR THE MOST DESIRABLE AND PRACTICAL IN THE CIRCUMSTANCES, BECAUSE IT :

(A) PARRIES THE QUESTION OF CHINA'S MEMBERSHIP IN THE GATT:

(B) AVOIDS HAVING TO INVOLVE HONG KONG IN NEGOTIATION OF

ENTRY TERMS WITH THE CONTRACTING PARTIES:

(C) ENABLES HONG KONG TO ACQUIRE SEPARATE GATT STATUS AT ANY

TIME MUTUALLY ACCEPTABLE TO CHINA, THE UK AND HONG KONG

THROUGH A DECLARATION BY THE UNITED KINGDOM: AND

(D) ONCE HONG KONG BECAME A SEPARATE CONTRACTING PARTY UNDER THE GATT ARTICLE XXVI 5(C) PROCEDURE, THERE IS REASON TO

BELIEVE THAT THE MERE CHANGE OF SOVEREIGNTY IN 1997 WOULD

NOT IN ITSELF HAVE ANY EFFECT UPON HONG KONG'S GATT RIGHTS

OR UPON ITS UNDERLINE NEXT FOUR WORDS DE FACTO/DE JURE STATUS

IN THE GATT.

13. THE OBSERVATIONS AT PARAGRAPHS 8 AND 12 (D) ABOVE ARE BASED ON

INFORMAL SOUNDINGS BY THE UNITED KINGDOM MISSION IN GENEVA,

TOGETHER WITH THE COUNSELLOR (HONG KONG), OF THE GATT SECRETARIAT

LEGAL SECTION ON A HYPOTHETICAL BASIS. THEIR VIEW WAS THAT IF HONG

KONG BECAME A CONTRACTING PARTY UNDER ARTICLE XXVI 5(C) PROCEDURE,

THERE WOULD BE NO QUESTION OF THAT CONTRACTING PARTY STATUS CEASING

SOLELY BY VIRTUE OF THE CHANGE OF SOVEREIGNTY IN 1997. ONLY IF HONG

KONG'S AUTONOMY IN THE CONDUCT OF ITS EXTERNAL COMMERCIAL RELATIONS

WAS TERMINATED WOULD THERE BE ANY QUESTION OF A SUSPENSION OR

TERMINATION OF SUCH STATUS. THIS HAD, IN FACT, OCCURRED WITH SOUTHERN RHODESIA ON ITS UNILATERAL DECLARATION OF INDEPENDENCE AND

THE UK SUSPENDED ITS EARLIER DECLARATION. EVEN IN THAT CASE THE

QUESTION OF WHETHER SOUTHERN RHODESIA'S GATT STATUS HAD REALLY BEEN SUSPENDED WAS AT BEST UNCLEAR, AND THE GATT MAINTAINED THE NAME

OF SOUTHERN RHODESIA IN ITS DOCUMENTATION AND CONTINUED TO ALLOCATE

PAPERS WHICH WERE NOT SENT OUT BE WERE HELD IN STORE IN THE GATT

PENDING SOME RESOLUTION OF THE SITUATION.

TIMING

14. EARLY RESOLUTION OF HONG KONG'S POST-1997 STATUS IN THE GATT

WILL REASSURE BOTH THE COMMUNITY AT LARGE IN HONG KONG AND ITS

TRADING PARTNERS THAT THE BASIS FOR HONG KONG'S FLOURISHING FREE

MARKET ECONOMY WILL BE ABLE TO CONTINUE. FURTHERMORE, HAVING REGARD

TO PARAGRAPH 4 OF ANNEX II TO THE JOINT DECLARATION THIS IMPORTANT

ISSUE MIGHT WELL BE ADDRESSED AT THE FIRST OR SECOND MEETING OF THE

JLG. MOREOVER, IT WOULD BE IN HONG KONG'S INTEREST TO SECURE WHAT IT DESIRES AS SOON AS POSSIBLE, HOPEFULLY WELL BEFORE TOO MUCH

ATTENTION IS DRAWN TO CHINA'S INTENTIONS VIS-A-VIS THE GATT AS IS

LIKELY TO HAPPEN WHEN THE CONTRACTING PARTIES START TO REVIEW

CHINA'S CURRENT OBWERVER STATUS IN THE GATT.

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