TNAG-1493-FCO40-2051-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 78

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United Kingdom Mission

37-39 rue de Vermont 1211 Geneva 20

Telex 22956

Telegrams Prodrome Geneva Telephone 34 38 00 33 23 85

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& pa GATT Budget верей Сатті ного когд

GATT:

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RP Madelin Esq

ITP1

Department of Trade and Industry

1 Victoria Street

LONDON SW1

Your reference

Our reference

Date 21 May 1986

AKC 122/

RÜCEIVED »

23 JUil 1986

Rebert

GATT: 1986 BUDGET CONTRIBUTIONS

1.

I owe you a report on the state of play as regards our 1986 budget contribution. As you will recall we put a temporary stop to the payment mechanism whilst we sorted out the implications of Hong Kong becoming a separate Contracting Party.

2.

I have now had the chance to discuss this matter with von Holzen (GATT Secretariat) and it is their intention to assess Hong Kong's contribution for 1986 with effect from 23 April, which was the date that we made our Declaration to the Director-General under Article XXVI(5)(C In monetary terms this means that our contribution will be reduced from SF4,461,200 to SF3,842,740. von Holzen told me that the Budget Committe of the GATT should give its formal blessing to this change in contributions and is working on a draft document. In the meantime

I attach a first draft, which I think has a number of deficiencies, for information. One of the problems concerns the language used to describe the change in Hong Kong's status.

3.

I see no reason why we should make our adjusted payment until such time as the formalities are completed, but I think you can assume that the reduced amount is a precise figure.

4.

There is also the question of Hong Kong's contribution to the Working Capital Fund. Although this will be a matter for Hong Kong there may be implications for us depending on the way in which their

contribution is calculated. For example, the total credit currently due to the UK is SF122,373. The provisional assessment for Hong Kong is SF46,300 which looks somewhat hefty by comparison with the UK figure. This is explained by the fact that the assessments were based in the case of the UK on 1965 figures and in the case of Hong Kong on 1985 figures. I have so far argued informally with von Holzen that the apparent incompatibility between the two amounts is not likely to bother us nearly as much as a request for an additional advance to the Working Capital Fund in order to restore the equilibrium between ourselv and Hong Kong. I think this argument will prevail but I mention it in passing for the sake of completeness.

cc: D Warren Esq, ECD (E), FCO M Redley Esq, HM Treasury

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