TNAG-2112-FCO40-3011-International-Rights-and-Obligations-Sub-Group-of-the-Sino-B-1990 — Page 17

CONFIDENTIAL

130407

MDHIAN 39

HAS TO BE NOTIFIED.)

BENEFITS

3. THIS CONVENTIONS FACILITATES INTERNATIONAL TRANSPORT AND REDUCES ITS COST BY THE ADOPTION OF UNIFORM RULES FOR THE ADMISSION OF PALLETS USED IN INTERNATIONAL TRANSPORT FREE OF IMPORT DUTIES AND RESTRICTIONS. TO HONG KONG WHOSE ECONOMY IS HEAVILY DEPENDENT ON FREE TRADE THROUGH ITS WORLD CLASS CONTAINER PORT, SUCH A BENEFIT HELPS TO ENCOURAGE. TRADERS TO MAKE USE OF THE PORT OF HONG KONG.

PROPOSALS

4. THE BRITISH SIDE PROPOSE THAT THE CONVENTIONS SHOULD CONTINUE TO APPLY TO THE HONG KONG SAR AFTER 30 JUNE 1997 IN ACCORDANCE WITH THE JOINT DECLARATION. TO ACHIEVE THIS RESULT, IT WILL BE NECESSARY FOR THE CPG IN SOME WAY TO INDICATE TO ALL PRESENT CONTRACTING PARTIES, AND ALL GOVERNMENTS WHICH MAY BECOME PARTIES BEFORE 1 JULY 1997, THAT ALL THE INTERNATIONAL RIGHTS AND OBLIGATIONS ARISING FROM THE CONVENTION AND ANNEXES: TO THE EXTENT TO WHICH THEY APPLY TO HONG KONG, WILL BE ASSUMED BY THE CPG WITH EFFECT FROM 1 JULY 1997 AND APPLY TO THE HKSAR OF THE PRC. IT WILL FURTHER BE NECESSARY TO ENSURE, SO FAR AS POSSIBLE, THAT THOSE CONTRACTING PARTIES EITHER AGREE, OR AT LEAST ACQUIESCE. IN THE OPINION OF THE BRITISH SIDE, THE BEST METHOD FOR SECURING THIS OBJECTIVE WOULD BE AS DESCRIBED IN PARA 7 OF THE PAPER HANDED TO THE CHINESE SIDE ON 15 MARCH 1989.'

DRAFT PAPER ENDS

WILSON

YYYY

MAIN

58

DISTRIBUTION

61

.HONG KONG AGREEMENT

. (RESTRICTED)

LIMITED

HKD

HD/FED

PUSD

RAD

PS/LORD CAITHNESS

PS/MR LENNOX-BOYD

MR MCLAREN

MR BURNS

NEWS D

ADDITIONAL 3.

MS FOAKES LEGAL ADVISERS

MS BARRETT LEGAL ADVISERS

PAGE

2

CONFIDENTIAL

MR FIFOOT LEGAL ADVISERS