TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 53

J A Shepherd Esq

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European Community Department Foreign and Commonwealth Office

London

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INTERNATIONAL TRADE POLICY DIVISION

DEPARTMENT OF TRADE AND INDUSTRY 1-19 VICTORIA STREET

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LONDON SWIH OET

Telephone (Direct dialling) 01-215) 5400

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Mr. When.

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17 June 1985

Dear John.

CHINA AND THE GATT

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In my letter of 10 May I promised you our considered views on your paper.

I enclose detailed comments on your draft. Subject to these, we would be happy to use it as the basis for future discussion.

For the introductory section (paragraphs 1-10) our comments take the form of a few specific points. For the remainder (Trade Policy Aspects and so on), I enclose a revised version with our changes side-lined.

Minor amendments apart, these changes have three effects: they strengthen (paragraph 14 bis) our analysis of the consequences of Chinese membership for the fabric of the GATT; they change slightly the paper's analysis (paragraph 15) of import restraint mechanisms; and they introduce into the conclusions a distinction between the question of principle whether China as a large state trader can be admitted to GATT (we agree, I think, that it is in practice too difficult to answer no) and the practical question what terms to seek in order to preserve GATT from the possible adverse conse- quences of accession (where we also seem to agree that some fairly tough special rules will be widely recognised as necessary).

If you are happy to proceed on this basis, a next stage might be for our Departments to submit a joint paper for discussion at some future meeting of EQS.

Copies go to recipients of my earlier letter.

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Yours sincerely

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Tony

A J Lane

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