TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 7

Hong Kong's contribution to the CCC would be likely to be the minimum payable by each contracting party i.e. 0.2 per cent of

of the CCC's annual budget. (This amounted to 573,472 Belgian Francs (BEF) in 1984/85 about dollars HK 711,110 at the exchange rate obtaining on 31 May 1985). This assumption is based on the fact that the minimum is paid by countries such as South Korea and Singapore. The former is a larger economy than Hong Kong though is poorer in per capita terms. The latter is a smaller economy than Hong Kong though is slightly richer in per capita terms.

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If Hong Kong were to become a contracting party to the GATT, it would appear both logical and politically desirable for it to have an official economic/trade mission in Geneva. This would do much to

to reassure other GATT contracting parties about the continuation of separate contracting party status for Hong Kong after 1997 whether or not China had by then become a contracting party with its own official economic/trade mission. The possibilities of official mission for Hong Kong would have to be explored with the Swiss authorities.

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No significant changes in the arrangements for representing Hong Kong's commercial interests in third countires are envisaged in the foreseeable future. (A possible exception might be Brussels, where the Hong Kong Government office is accredited to the Belgian Government as part of the British Embassy to that country. With Hong Kong having autonomy in the conduct of its external commercial relations it might be possible for the Brussels office to be accredited with EEC direct. However this has not been looked into). Hong Kong will continue to look to British posts for support given that HMG will be responsible

responsible for the administration of Hong Kong until 30 June 1997. The Sino-British Joint Declaration (Section VI of Annex 1) states that thereafter the SAR may as necessary establish official and semi-official economic and trade missions in foreign countries, reporting the establishment of such missions to the Central People's Government for the record.

Public reaction

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Resolution of Hong Kong's status in the GATT and the CCC beyond 1997 would contribute immensely to confidence in Hong Kong's continued prosperity. It would be welcomed by the commercial community and by the public at large in Hong Kong.

Publicity

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This issue needs referral to HMG and subsequent discussion in the JLG. Therefore no publicity should be given at this stage.

CONFIDENTIAL