TNAG-1493-FCO40-2051-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 147

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CONFIDENTIAL

OF HONG KONG'S CONTRACTING PARTY STATUS, SECURED BY THE ARTICLE

XXVP(5)(C) ROUTE, CEASING SOLELY BY VIRTUE OF THE CHANGE OF SOVEREIGNTY # 1997. ONLY IF THE HONG KONG SAR'S AUTONOMY (IN THE

CONDUCT OF ITS EXTERNAL COMMERCIAL RELATIONS WAS TERMENATED COULD

THERE BE ANY QUESTION OF A SUSPENSION OR TERMINATION OF ITS CONTRACTING PARTY STATUS.

6. THESE LEGAL EXPERTS ARE OF THE WIEW THAT THE PARALLEL STATEMENT BY CHINA WAS NOT ESSENTRAL, BUT WAS DESIRABLE TO SETTLE ANY DOUBTS FROM OTHER CONTRACTING PARTIES. THE CURRENT AND FUTURE STATUS OF

CHINA IN GATT WAS ALSO IMMATERIAL TO THE POSITION.

7. THEREFORE URGE THE JAPANESE GOVERNMENT TO ACCEPT THIS POSITION AND NOT PURSUE ANY COURSE OF ACTION WHICH MIGHT DIRECTLY OR INDIRECTLY UNDERMINE THE HONG KONG SAR'S GATT STATUS AFTER 1997.

ENDS.

YOUDE

HONG KONG AGREEMENT: RESTRICTED

LIMITED

HD/HKD

HD/FED

RESEARCH D (FE)

DEP/HD PUSD PS/MR RENTON MR WILSON

COPIES TO:

MR FIFOOT, LEGAL ADVISERS

CONFIDENTIAL

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