TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 110

CONFIDENTIAL

shall include action to be taken by the two Governments

(a)

(b)

5.

-

to enable the Hong Kong SAR to maintain its economic relations as a separate customs territory, and in particular to ensure the maintenance of Hong Kong's participation in the GATT, the

MFA and other international arrangements;

to ensure the continued application of international rights and

obligations affecting Hong Kong.

The British side believe that early resolution of the question of Hong Kong's continuing participation in the GATT would do much to reassure Hong Kong and its trading partners that the basis for Hong They also believe that it would do much to show has the Jent Liaison group had sommenced its work fleurinely

Kong's flourishing free market economy will be able to continue. Hong Kong currently derives its GATT rights and obligations from the United Kingdom, which has accepted the GATT also in respect of territories for which it has international responsibility. It would however be consistent with the degree of autonomy which Hong Kong currently enjoys in the exercise of its external commercial relations, and which is prescribed for the future SAR in sections VI and XI to the Joint Declaration, if Hong Kong were now to become a separate contracting party to the GATT. The British side believe that such a course would provide an important boost to investors. It would also enable the SAR automatically to

within The GATT

after 1 July 1997 retain Hong Kong's status as a full contracting party Hong Kong's position in the GATT could thus be settled once and for all. would be no subsequent need for two totally different trading systems to be represented in a single GATT delegation—–—–

There

6. For the above reasons, the British side propose that they and the Chinese side should agree that appropriate steps be taken, as soon as possible, to secure separate Contracting Party status for Hong Kong within the GATT. GATT Article XXVI (5) (c) provides for

this. It states that:

"If any of the customs territories, in respect of which a

Contracting Party has accepted this Agreement, possesses or acquires full autonomy in the conduct of its external commercial relations and of the other matters provided for in

CONTINGUNIT AT