TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 182

GRS 370

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RECEIVED

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INDEX

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- 2 JUL 1985

CONFIDENTIAL EX

FM UKMIS GENEVA 101755Z JUNE 85

TO IMMEDIATE FCO

TELNO 227 OF 10 JUNE

AND TO IMMEDIATE DTH

перс

IN FO IMMEDIATE HONG KONG, PEKING, UKREP BRUSSELS,

TAY

722/0012/6

WASHINGTON

112

HONG KONG TELNO 1123

112

1. ARGUMENTS IN T.U.R. OVERLOOK THE FACT THAT THE BASIC GENERAL AGREEMENT IS NOT STATIC BUT SUBJECT TO INTERPRETATION BY DECISION AND PRECEDENTS. THESE SHOW THAT THE HONG KONG DECLARATION IS AN ESSENTIAL ELEMENT IN CHANGING HONG KONG'S STATUS IN THE GATT. (BASIC INSTRUMENTS AND SELECTED DOCUMENTS 6S/11, 95/16 AND 15S/64 REFER.)

2.

WE HAD HOPED TO AVOID THE CONFUSING GROUND OF DE JURE AND DE FACTO BUT IT MAY HELP TO REHEARSE THE ARGUMENTS:

A) THE UK DECLARATION WILL HAVE THE EFFECT OF GIVING HONG KONG DE FACTO STATUS IN THE GATT. AT THAT POINT HONG KONG WILL BE ABLE TO EXERCISE THAT STATUS BY TAKING ONE OF THREE OPTIONS OPEN

TO IT.

1-) INFORM GATT IT DOES NOT (REPEAT NOT) WISH TO BE CONSIDERED

A CONTRACTING PARTY.

1) FAIL TO RESPOND IN WHICH CASE IT CONTINUES INDEFINITELY TO BE A DE FACTO CONTRACTING PARTY (BUT IS NOT CONSIDERED DE JURE

NOR IS UNIVERSALLY REGARDED AS A FULL CP).

INFORM GATT IT WISHES TO BE DEEMED (IE DE JURE) A CONTRACTING

PARTY. B) THE PROPOSED HONG KONG DECLARATION IS OF COURSE OPTION (HEI) ABOVE. APART FROM THE DISTINCT CHARACTER OF HONG KONG'S STATUS, THE NOVELTY WILL BE THAT THE OPTION WILL BE EXERCISED IMMEDIATELY IT IS AVAILABLE ME THE SAME DAY AS THE UK INFORMS THE GATT THAT HK POSSESSESS FULL AUTONOMY IN THE CONDUCT OF ITS EXTERNAL COMMERCIAL RELATIONS AND OF OTHER MATTERS PROVIDED FOR IN THE AGREEMENT. (IN SOME CASES, YEARS HAVE PASSED BEFORE THE OPTION

#IS EXERCISED.)

3. OUR ARGUMENTS AGAINST WIL • AND ''SHOULD'' HAVE LARGELY BEEN BASED ON THE NEED FOR US TO AVOID APPEARING TO PRE-EMPT THE RIGHT OF HONG KONG TO DECIDE AS IT SEES FIT (PARA 2 ABOVE).

CONFIDENTIAL

/ THA GATT