TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 21

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Kong's future GATT status, given that PRC is not at present a member

of GATT. In any case, more logical and more in keeping with autonomy which Joint Declaration and its Annexes prescribe for SAR

in economic field, to have two different trading systems separately

represented in GATT. (If necessary) Fear that insistence on

could undermine confidence in China's commitment to participation under a Chinese umbrella allows the SAR to conduct

ajal external commercial relations on its own. This would have a very

serious effect in Hong Kong.

Effect of separate GATT Contracting Party status for Hong Kong on

China's re-entry in to GATT? (Defensive)

5. Two entirely separate issues.

Why propose recourse to GATT Article XXIV (5)(c) in order to seek separate Contracting Party status for Hong Kong? (Defensive)

6.

We believe that this is best way of proceeding. It would:

enable Hong Kong to acquire separate GATT status at any time mutually acceptable to the UK, China and Hong Kong;

- preclude the need for any further action to be taken in 1997.

(SAR would then automatically inherit Hong Kong's GATT rights

and obligations);

avoid having to involve Hong Kong in negotiating entry

with GATT Contracting Parties.

Any other options? (Defensive)

7. In theory, yes.

GATT Article XXXIII states that:

"A Government not party to this Agreement, or a government acting on behalf of a separate customs territory possessing full autonomy

in the conduct of its external commercial relations and of the

other matters provided for in this Agreement, may accede to this

Agreement on its own behalf or on behalf of that territory, on terms to be agreed between such government and the Contracting Parties. Decisions of the Contracting Parties under this paragraph shall be taken by a two thirds majority." However, there are drawbacks to use of Article XXXIII, viz:

(a) we understand that recourse to this Article reflects a

procedure normally used by independent sovereign states which have had no previous connection with the GATT. Neither consideration

applies to Hong Kong;

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