TNAG-1493-FCO40-2051-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 117

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GRS 400

CONFIDENTIAL

FM HONG KONG

TO PRIORITY FCO

TELNO 1662

CONFIDENTIAL

AMENDED DISTRIBUTION 30 MAY 1986

OF 3OO74OZ MAY 86

INFO PRIORITY PEKING, UKMIS GENEVA

UKMIS GENEVA PLEASE PASS COPY TO CARTLAND.

JLG VP: HONG KONG AND THE GATT

HKR 12211

RECEIVED IN RECISTRY 1 0 JUN 1986

DES

INDEX

WE HAVE HEARD INDIRECTLY THAT THE MACAU ADMINISTRATION HAVE DRAWN THEIR OWN CONCLUSIONS FROM THE SUCCESSFUL HANDLING BY HMG AND CHINA OF THE SEATING OF HONG KONG AS A CONTRACTING PARTY AND ARE PRESSURING PORTUGAL TO MAKE A GATT ARTICLE XXVI (5) (C) DECLARATION IN THEIR FAVOUR. SPEAKING TO DONALD TSANG EARLIER THIS WEEK KAYSER SUNG OF THE MONTHLY JOURNAL TEXTILE ASIA SAID HE HAD LEARNT THIS ON GOOD AUTHORITY. SUNG THOUGHT THIS PROPOSAL WOULD BE PUT TO THE CHINESE DURING THE COURSE OF THE NEGOTIATIONS ON THE FUTURE OF MACAU.

2. THIS IDEA IS MOST UNWELCOME, AS WE OURSELVES ARE NOT HOME AND DRY (VIDE JAPANESE, INDIAN AND POSSIBLY CONTINUING U.S. REACTIONS). A DISCUSSION IN THE GATT ABOUT MACAU MEMBERSHIP COULD RE-OPEN PANDORA'S BOX, PARTICULARLY AS MACAU TAKES NO PART IN GATT AT PRESENT. WE CANNOT SUPPOSE THAT IN SUBSTANCE THE CHINESE WOULD WELCOME THE IDEA.

3. THE QUESTION IS WHAT, IF ANYTHING, WE CAN DO ABOUT IT. SEEN FROM HERE, NOTHING CAN BE ACHIEVED ON THE POINT BY SPEAKING TO THE PORTUGUESE. WE REMAIN UNIMPRESSED WITH THEIR APPROACH TO THE FORTHCOMING NEGOTIATIONS: BRIEF DISCUSSION WITH THE PORTUGUESE AMBASSADOR HERE ON THE OCCASION OF THE APRIVAL OF THE NEW GOVERNOP OF MACAU ON 27TH SUGGESTED THAT THE POPTUGUESE ARE STILL DEVOTING THEIR MAIN EFFORT TO SUCH ISSUES AS WHICH LANGUAGE TO NEGOTIATE IN AND WHETHER PORTUGUESE FACE PERMITS ALL THE NEGOTIATIONS TO TO BE HELD IN PEKING (AND TO BE DESCRIBED BY THE THINCCHINESE AS **TALKS'').

4. MORE MIGHT BE ACHIEVED BY SPEAKING TO THE CHINESE, WITH WHON WE SEEM TO HAVE A GOOD UNDERSTANDING ON THE BASIC DO'S AND DON'TS OF THE MACAU NEGOTIATIONS (SEE FOR EXAMPLE WILSON'S DISCUSSION WITH KE IN BRUSSELS). IT MIGHT BE UESEFUL IF WILSON WEPE TO HAVE A FURTHER WORD WITH KE IN THE MARGINS OF THE LONDON JLG, UNDERLINING THAT, WHILE IT IS NOT OUR AFFAIR, THE HANDLING OF THE

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