TNAG-1491-FCO40-2049-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 127

FCO 40/2049

CONFIDENTIAL

14973 - 1

(C)

3.

AND DEVELOP ECONOMIC AND TRADE RELATIONS. IT FULFILS THE

CRITERIA IN ARTICLE XXVI(5)(C) OF POSSESSING THE FULL

AUTONOMY IN THE CONDUCT OF ITS EXTERNAL COMMERCIAL

RELATIONS AND OF THE OTHER MATTERS PROVIDED FOR IN THE

GATT. MOREOVER, ITS POSITION IS SET FORTH IN A LEGALLY

BINDING INTERNATIONAL AGREEMENT, REGISTERED AT THE UN.

THE REASON WE PROPOSE TO FOLLOW THE ARTICLE XXVI(5)(C)

ROUTE IS PRECISELY TO AVOID QUESTIONING BY THIRD

COUNTRIES, AND TO AVOID HONG KONG BECOMING SUBJECT TO THE TERMS NEGOTIATED FOR CHINA'S RE-ENTRY TO THE GATT. IT IS

IN OUR AND US INTERESTS THAT HONG KONG REMAIN PROSPEROUS

AND THAT NEGOTIATION OF TERMS FOR CHINESE ACCESSION TO

GATT HAS NO IMPACT ON HONG KONG'S TRADE

WITH THE WEST. CRUCIAL FOR THIS THAT HONG KONG SHOULD

RETAIN PRESENT POSITION IN GATT. ARTICLE XXVI(5)(C)

ROUTE BEST WAY OF MAINTAINING THIS.

GRATEFUL FOR YOUR ADVICE ON WHETHER WE SHOULD APPROACH

STATE AT THIS STAGE TO EMPHASISE POLITICAL FACTORS AND TO ASK

THEM TO TALK TO TRADE.

HOWE

HONG KONG AGREEMENT: RESTRICTED

LIMITED

HD/HKD

HD/FED

RESEARCH D (FE)

D/HD PUSD ECD (E)

MR WILSON

COPIES TO:

MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS

MR HUM FID

MR MADELIN, DT1

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