TNAG-1492-FCO40-2050-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 54

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BACKGROUND TO PQ

MR DEAKINS: PARLIAMENTARY QUESTION: BACKGROUND

Following discussions with the Chinese Government in the Joint Liaison Group we agreed that the best course of action to ensure Hong Kong's continued participation in the GATT after 1 July 1997 (something the two Governments were committed to achieve under the Joint Declaration) was for the UK Government to make a declaration to the GATT under GATT Article XXVI (5)(c). The UK declaration made it clear that Hong Kong possesses full autonomy in the conduct of its external commercial relations and of the other matters provided for in the GATT and that Hong Kong could therefore be deemed to be a contracting party to the GATT. It was agreed that the PRC Government would make a parallel declaration about the status of the Hong Kong SAR after 1 July 1997 which would make clear that Hong Kong as "Hong Kong, China", could continue to be deemed to be a contracting party after 1997.

Our

confirmed

understanding,

by

informal consultations with the GATT Secretariat, is that this procedure did not require the consent of other GATT members, or offer them a opportunity to object. We nevertheless agreed with the Chinese that it would be prudent to give advance information of our intended action to a number of key GATT members to seek to forestall any queries or objections. We and the Chinese therefore made parallel approaches to almost 40 GATT members in the week prior to the declarations.

The reaction of almost all was

positive and supportive.

particular

Mr Deakins has not previously shown interest in Hong Kong. He was, however, previously a Minister at the Department of Trade and Industry and it may therefore be that his primary interest is the GATT angle.

HONG KONG DEPARTMENT

2 May 1986

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