TNAG-2752-FCO40-3967-Organisation-for-Economic-Co-operation-and-Development-(OECD-1994 — Page 156

DRAFT TELEGRAM TO HONG KONG

Confidential

YOUR TELNO 912: OECD: OBSERVER STATUS FOR HONG KONG

From ERD

Summary

1. Agree that observership on trade committee best way

forward. Will support any Hong Kong application. Hope Hong

Kong Permanent Representative to GATT will be able to

call on our Ambassador to the OECD to discuss handing.

Detail

2. Believe Hong Kong will be able to make a constructive

contribution as an observer to the trade committee

and merits participation both because of its good

reputation as a trader and because of its trading volume.

3. However fear that some other members may be reluctant to accept Hong Kong's application either because of a misunderstanding of the implications of 1997 or because of

a desire to limit the size of the Committee.

4.

Careful briefing and lobbying, and perhaps care with the

wording of the application and of the OECD's invitation, should help neutralise the first fear. The second may be more difficult, especially as it is an argument that we ourselves

have used in the past to discourage over enthusiastic expansion

of the OECD. The Trade Committee is one of the key OECD

committees and one that we find very valuable. It currently has 24 members (plus the EC) and 6 observers (Korea, Mexico,

Hungary, Poland, and the Czech and Slovak republics). Others including some Latin Americans, other East Europeans

(including Russia and the Baltics), Cyprus, Malta and possibly Singapore are also believed to be interested in observership.

Obviously the Committee cannot absorb a large number of new

observers, all with speaking rights, without running some risk