TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 42

CONFIDENTIAL

matters for consideration

during

the first half of the period

between the establishment of the Joint Liaison Group and 1 July 1997

shall include action to be taken by the two Governments

(a)

(b)

5.

-

ensure

to enable the Hong Kong SAR to maintain its economic relations

as a separate customs territory,

to and in particular

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 Kong's flourishing free market economy will be able to continue.

They also believe that it would do much to show that

Liaison Group had commenced its work effectively.

the Joint

•

6. Hong Kong currently derives its GATT rights and obligations from the United Kingdom, which has accepted the GATT also in respect of other territories for which it has international responsibility I t

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 enable the SAR automatically to retain Hong Kong's status within the GATT as a full contracting party as from 1 July 1997. Hong Kong's long-term position in the GATT could thus be

made clear at

early an

stage, SO promoting

in confidence

the

economy.

agree

7. For the above reasons, the British side propose that they and

the Chinese side should

taken,

that appropriate steps be

as

soon as possible, to Hong Kong within

secure separate Contracting Party status. the GATT. GATT Article XXVI (5)(c) provides

this. It states that:

for

for

CONFIDENTIAL