TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 20

TG1ADH

CONFIDENTIAL

Top copy with Mr. Pomell for

Торсом

Submissie to Dr. Milson

JOINT LIAISON GROUP, 22—25 JULY (22 25 JULY 1985)

HKK OTC/24

(C) GATT, MFA AND CCC

RECEIVED

12 JUL 1985

GATT

155

Enter GATT

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General

1.

British and Chinese sides both recognise fundamental importance of GATT to Hong Kong's economic prosperity. Early resolution of

Hong Kong's future GATT status would do much to promote continuing

domestic and international confidence in the Hong Kong economy and

would encourage investors. Important to build up confidence in JLG

as effective forum for continuing discussion on Hong Kong's future.

Early agreement on GATT issue would be valuable step in this

process.

Entrustment

2. We explained to you in talks that Hong Kong enjoys de facto

autonomy in the conduct of its external commercial relations. Have

now formalised this long-standing policy by issuing an instrument of

entrustment to Govenor of Hong Kong. This confirms that he has

executive authority to conduct Hong Kong's external commercial

relations. (IF NECESSARY) Yes, we will show you the text of the

instrument of entrustment.

Why not maintain Hong Kong's status quo within GATT until 1997?

(Defensive)

3. Because alternative course more in keeping with Hong Kong's

present and future status, available now. Also important for

investor confidence to settle this question at an early date.

Course we are proposing would enable SAR automatically to retain Hong Kong's status as full Contracting Party to GATT as from 1 July

1997.

Hong Kong participation in GATT after 1997 under Chinese umbrella?

(Defensive)

4.

Such an approach not conducive to early resolution of Hong

CONFIDENTIAL