TNAG-1402-FCO40-1874-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 89

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(b) Where British international commercial relations

were involved, the Hong Kong Government could

nevertheless exercise a similar responsibility

provided that they did so within established limits.

The development of the deliberate policy of successive British

Governments that Hong Kong should conduct its own external

commercial affairs, even to the extent of inconsistency with

HMG's policies is demonstrated by the adoption by Hong Kong of

positions opposed or inconsistent with that of the EC (para 4 above).

Such a practice and policy, coupled with an appropriate entrustment

of the power to negotiate and conclude trade agreements (see

Annex below) which the Secretary of State would be minded to issue,

is, it is believed, sufficient to establish the competence of

Hong Kong "in the conduct of its external commercial relations

and of the other matters provided for in" the GATT.

Competence and autonomy

7.

*

The proposition which the metropolitan state is required to

establish for the purposes of Article XXVI 5 (c) of the GATT is

that the territory possesses "full autonomy" in the relevant field.

Two sets of questions may fall for consideration here, namely the interpretation of the GATT and the relevance of the constitutional relationship between the metropolitan state and the dependent

territory concerned.

18.

Footnote:

"the other matters provided for in the" GATT would appear to be those restrictions or permitted actions which operate internally in respect of imports or exports

eg the requirement for national treatment on internal taxation or regulation; provisions relating to anti-dumping; publication of trade regulations; subsidies. Hong Kong in practice has freedom of action in this sphere as well as in external commercial relations.

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