CONFIDENTIAL
United Kingdom Mission
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DJ Plumbly Esq
WASHINGTON
Our reference
Date
2 May 1986
Hear Beach
HONG KONG/CHINA/GATT
1. Thank you for copying to me your minute to Brian Crowe of 1 April, drawing attention to the legal constraint upon the US granting unconditional MFN status to communist countries.
2.
As seen from here, the establishment of separate contracting party (CP) status for Hong Kong is nicely calculated to meet this point. If we had done nothing and, as the Chinese originally proposed, merely assumed that existing arrangements would continue after 1997, with the Chinese speaking for Hong Kong in GATT in place of the UK (assuming, of course, that China had by then become a CP), the US would, of course, have been obliged to treat Hong Kong upon the same basis as China.
3. The whole point of our current exercise is to establish clearly in the eyes of all CPs that, for GATT purposes, Hong Kong can and should be treated differently from China. We think that the Chinese Declaration, which makes clear in terms that Hong Kong will maintain its capitalist economic and trade systems after 1997, provides the evidence which the Administration might need to provide to Congress in order to justify granting continued MFN status to Hong Kong, after it has become an SAR of the People's Republic of China,
4.
I enclose copies of both the UK and PRC Declarations.
REC
HKK122/1
3.HT
16 MAY 1986
JULA
PA
a faken
38 1615
C Hum Esq, Hong Kong Department, FCO R Madelin Esq, ITP1, DTI
you
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A E Montgomery
CONFIDENTIAL
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