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western contracting parties; if, however, the attitude of contracting parties was lukewarm and procrastinating, then the Chinese would doubtless become very tough in negotiations, and put contracting parties in the difficult political position of having to refuse them entry. The stance of the EC and the US was clearly crucial. Early indications from the EC were that they were taking a rather cautious line to Chinese membership, seeking to establish pre-conditions before negotiations could begin. On the other hand the US appeared to be taking a line that there needed to be a long transitional period before a formal Chinese application during which time the Chinese would have to prove their credentials as a nation able to deliver to GATT obligations. Neither of these lines would be acceptable to the Chinese. Chinese attitudes were perhaps evidenced by their willigness to concede to us over the status of Hong Kong in GATT; had McDonnell been in his current position at the time, and been consulted, he would have advised against the Chinese making this concession until there had been positive statements from the EC welcoming a Chinese application for GATT membership. The fact that they had been prepared to concede on Hong Kong at this stage was perhaps indicative of their wish to create an atmosphere in which they would be received sympathetically, and could look forward to tough but successful negotiations of GATT entry, rather than adopting a tough stance for the beginning and making use of every possible lever, such as negotiations over Hong Kong's status.
6. I am sure that you and other copy addressees will find McDonnell a congenial and useful contact as the China and GATT saga begins to roll. As you may know, I am leaving Canberra and returning to the FCO very shortly, but will make sure that my successor, David Mackilligin, is introduced to John McDonnell, in the hope that it will prove useful to you to have reports of this nature from time to time.
Yours,
Veter
P S COLLECOTT
CC
A J Lane Esq, ITP DTI
D Hadley Esq, MAFF
M Jay Esq, Cabinet Office
Peking
Washington
UKMis Geneva UKRep Brussels
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