TNAG-2056-FCO40-2934-Hong-Kong-and-the-Organisation-for-Economic-Cooperation-and--1990 — Page 93

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A) LEGAL PROBLEMS

5. WHILE IT WOULD THEORETICALLY BE OPEN TO US TO EXTEND THE OECD CONVENTION TO COVER HONG KONG UNDER THE UMBRELLA OF UK MEMBERSHIP, WE SEE NO LASTING PURPOSE IN PURSUING SUCH A COURSE

GIVEN THE SPECIAL CIRCUMSTANCES OF HONG KONG'S FUTURE AND THE SIZE OF ITS ECONOMY. THE CURRENT MEMBERSHIP WOULD NOT IN ANY CASE TOLERATE SUCH AN APPROACH. THE ONLY PRACTICAL WAY FORWARD IS THEREFORE TO DEAL WITH HONG KONG AS A SEPARATE ENTITY. THERE

IS CONSIDERABLE DOUBT AS TO WHETHER HONG KONG WOULD BE ELIGIBLE FOR FULL OECD MEMBERSHIP IN ITS OWN RIGHT UNDER ARTICLE 16 OF THE OECD CONVENTION WHICH STATES THAT 'THE (OECD) COUNCIL MAY DECIDE TO INVITE ANY GOVERNMENT PREPARED TO ASSUME THE OBLIGATIONS OF MEMBERSHIP TO ACCEDE TO THIS CONVENTION.' ALTHOUGH OUR LEGAL ADVISERS ARE STILL CONSIDERING THE MATTER, VERY INFORMAL SOUNDINGS SUGGEST THAT THE OECD LEGAL SERVICES WOULD PROBABLY TAKE THE VIEW THAT THE MOST NATURAL INTERPRETATION OF 'GOVERNMENT' IS ONE REPRESENTING A SOVEREIGN STATE. IT MIGHT BE POSSIBLE TO ARGUE THAT HONG KONG, THOUGH NOT A SOVEREIGN STATE, DOES HAVE ITS OWN GOVERNMENT WITH A HIGH DEGREE OF AUTONOMY IN THE CONDUCT OF ITS AFFAIRS. BUT WE COULD CERTAINLY NOT EXCLUDE THE POSSIBILITY OF A LEGAL CHALLENGE TO ANY MEMBERSHIP BID ON HONG KONG'S BEHALF.

6. LEGALLY IT MIGHT BE EASIER TO ARGUE FOR SOME INTERMEDIARY FORM OF ASSOCIATION RATHER THAN FULL MEMBERSHIP. ALTHOUGH THE OECD CONVENTION DOES NOT PROVIDE EXPLICITLY FOR SUCH A STEP, A PRECEDENT EXISTS IN THE CASE OF YUGOSLAVIA, WHICH HAS BEEN AN ASSOCIATE MEMBER FOR MANY YEARS. WHILE YUGOSLAVIA DOES NOT HAVE ANY VOTING POWERS AND IS EXCLUDED FROM CERTAIN COMMITTEES, IT DOES HAVE OBSERVER STATUS IN THE COUNCIL AND IS REGARDED AS A MEMBER COUNTRY IN RESPECT OF CERTAIN OECD ACTIVITIES. THERE ARE ALSO THE MORE AD HOC ARRANGEMENTS ENJOYED BY MEXICO AND KOREA.

B) CHINESE ATTITUDE

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WE WOULD OBVIOUSLY NEED TO CONSULT THE CHINESE BEFORE TAKING ANY STEP TO RAISE THE QUESTION OF OECD MEMBERSHIP. WE SUSPECT THAT CHINA MIGHT FIND AN OECD RELATIONSHIP FOR HONG KONG LESS PALATABLE THAN ONE WITH GATT OR OTHER GENUINELY INTERNATIONAL OR REGIONAL ORGANISATIONS. OECD IS AFTER ALL A LIMITED MEMBERSHIP CLUB OF THE DEVELOPED CAND MULTI-PARTY) NATIONS. ALTHOUGH THIS COULD GIVE CHINA AN EAR INTO THESE COUNTRIES' DELIBERATIONS AFTER 1997, THE CHINESE MIGHT WELL TAKE EXCEPTION OF THE

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