TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 13

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2. I also sympathise with the view that we should only then tell the Chinese

the of entrustment if they enquire

about the formal nature of HR is external commercial autonomy, but Dor Wibon's view, that we tell them" without being prodded, has been endorsed by Ministers. AND CC C : ENTRUSTMENT OF AUTHORITY TO THE L.cfm HONG KONG'S EXTERNAL ECONOMIC RELATIONS 4/7

139

In para 4 of his letter of 26 June to Sir John Freeland, Steel records the Attorney General's view that we would be justified in seeking separate Contracting Party status for Hong Kong within the GATT (under GATT Article XXVI (5) (c)) in view of the de facto authority which Hong Kong enjoys in the conduct of its external commercial relations ... especially if reinforced by an explicit Entrustment of the kind now proposed".

2.

onomy

A draft instrument of Entrustment is now in hand.

I am minuting about it separately. Meanwhile, you may wish to consider further Dr Wilson's view (the sidelined sentence in para 3 of his comments on Mr Galsworthy's submission of 5 June) that we should tell the Chinese about our proposal for an appropriate instrument of entrustment in the JLG and before any such instrument issues.

3

I think that despite the risks which Dr Wilson has identified, there would be merit in issuing the entrustment before the JLG begins to consider our proposals for Hong Kong's future status in the GATT and CCC. This is clearly what Hong Kong and Peking think we have in mind. It would mean that provided we can obtain Chinese agreement to Hong Kong's separate membership of the GATT and CCC, the way would immediately be clear for us to make formal approaches to the relevant parties. No further preparatory groundwork would be necessary on the constitutional front.

4.

We should of course need to explain to the Chinese what we had done and why. If they were to ask to see the text of the entrustment we could show it to them. It would, after all, be shown to any state which wished to see it before entering into a trade agreement with Hong Kong under the "new" arrangements. This would not be true of the complementary and confidential despatch recording the continuing constitutional relationship between the UK and Hong Kong.

4 July 1985

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Hong Kong Department

CONFIDENTIAL

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12 JUL 1985

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