TNAG-1491-FCO40-2049-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 76

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(A) THEORETICALLY, THE ATTITUDE TO GATT OF THOSE PRESENTL

POWER IN CHINA MIGHT WELL BE TO TRY BINDING THEIR SUCCESS-

ORS TO CURRENT ECONOMIC POLICIES BY EXTERNAL INSTITUTIONAL

COMMITMENTS,

(B) REAL CHANGE IN CHINESE ECONOMIC POLICIES AND PRACTICES

WAS LIKELY TO TAKE A LONG TIME TO COME ABOUT AND THE PRO-

CESS WAS UNLIKELY TO BE SMOOTH PARTLY BECAUSE OF DIFFERENT

IDEAS AT DIFFERENT LEVELS OF THE CHINESE BUREAUCRACY AND

PARTLY BECAUSE OF AD HOC REACTIONS TO THE MANY QUESTIONS,

IMPLICATIONS AND PROBLEMS THAT HAD NOT BEEN ANTICIPATED

OR FULLY APPRECIATED. THE TREND WAS IN GENERAL MORE PRAG-

MATIC AND LESS DOGMATIC BUT THE PROCESS WAS GRADUAL AND

EVOLUTIONARY,

(C) WHILST (A) ABOVE MIGHT BE SEEN BY SOME AS AN ARGUMENT FOR

ENCOURAGING CHINA'S EARLY RETURN' TO GATT, (B) ABOVE

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MIGHT BE SEEN BY OTHERS AS A REASON FOR MAINTAINING LONGER

TERM PRESSURE AND NOT BEING RUSHED INTO WAIVING ENTRY RE-

QUIREMENTS IN A WAY THAT MIGHT ULTIMATELY SERVE TO UNDER-

MINE THE GATT ITSELF.

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4. MURPHY LEFT THE CLEAR IMPRESSION THAT THE U.S. WOULD CONTINUE

TO TAKE A FIRM LINE ON CHINESE ACCESSION IF FOR INSTANCE

THE CHINESE TRIED TO OBTAIN STATUS BY JOINING THE CODES ONE

BY ONE THEY WOULD SIMPLY BE MET WITH 'NON-APPLICATION' BY THE

U.S. IN EACH CASE. MURPHY'S CONCERN SEEMED TO CENTRE ON THE

FACT THAT THE UNITED STATES MIGHT BE THE ONLY ONE TO TAKE SUCH

A FIRM LINE AND HE SEEMED TO BE LOOKING FOR ARGUMENTS, INFORM-

ATION AND REASSURANCE TO SUPPORT THAT LINE.

POINTS OF PURELY BILATERAL INTEREST ON TEXTILES ETC WILL BE

REPORTED SEPARATELY. THIS MESSAGE HAS BEEN COPIED TO MONT-

GOMERY (UKMIS),

ENDS