TNAG-1491-FCO40-2049-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 75

CHINA AND THE GATT

CONFIDENTIAL

;

MURPHY MET MACLEOD AND CARTLAND FOR ONE HOUR ON THE AFTERNOON OF WEDNESDAY 12 FEBRUARY, ON AN INFORMAL AND PERSONAL BASIS. HE RAISED ONLY ONE SUBJECT - CHINA AND THE GATT.

HE DID NOT AFTER ALL ENQUIRE ABOUT HONG KONG'S GATT STATUS AND

THE SUBJECT THAT TOPIC WAS THEREFORE NOT MENTIONED AT ALL.

OF FREE TRADE AGREEMENTS WAS DISCUSSED BRIEFLY (MURPHY WILL HAVE RESPONSIBILITY IN USTR FOR NEGOTIATING WITH CANADA AFTER HE WILL ALSO HANDLE U.S./ HIS RETURN TO WASHINGTON IN MARCH

MEXICO TRADE RELATIONS), BUT ON THE POSSIBILITY OF A U.S./ HONG KONG FTA, MURPHY SIMPLY SAID THAT HE DID NOT SEE IT HAPPEN- ING (IE, DISMISSED IT AS VERY UNLIKELY),

2.

MURPHY'S CONCERN ON CHINA WAS THAT HE SENSED A GROWING FEEL- ING THAT CHINA SHOULD BE ALLOWED A RELATIVELY QUICK AND EASY PASSAGE INTO THE GATT ON THE GROUNDS THAT IT WAS SOMEHOW

-

'SPECIAL' HE FELT THAT THE U.S. HAD SUCCEEDED IN SLOWING THINGS DOWN, BUT THOUGHT THAT DUNKEL WANTED TO BE THE DIRECTOR-

HE PARTICULARLY MEN- GENERAL WHO BROUGHT CHINA INTO THE GATT. TIONED PACIFIC BASIC COUNTRIES HAVING BILATERAL ARRANGE-

Basin I

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MENTS WITH CHINA AUSTRALIA, NEW ZEALAND AND CANADA - BEING SOFT ON CHINA'S GATT ENTRY. HE WANTED MACLEOD'S PERSONAL VIEWS AND CHINA INSIGHT FROM A HONG KONG PERSPECTIVE.

AS

3.

MACLEOD EMPHASIZED THAT HONG KONG OFFICIALS ACTUALLY HAD MUCH LESS KNOWLEDGE AND INSIGHT ON CHINA THAN MIGHT BE EXPECTED. THEIR VIEWS TENDED TO BE IMPRESIONISTIC AND SPECULATIVE AND THERE WAS ALSO SENSITIVITY OVER HONG KONG BEING CONSULTED ON HOW TO HANDLE CHINA. WITH THIS IN MIND SOME GENERAL POINTS COULD

NEVERTHELESS BE MADE :

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