TNAG-2752-FCO40-3967-Organisation-for-Economic-Co-operation-and-Development-(OECD-1994 — Page 91

20 July 1993

CONFIDENTIAL

Mr T H Chau JP

Secretary for Trade and Industry

2nd floor, East Wing

Central Government Offices

bean Brian,

OECD

60

Office of the

British Senior Representative

Sino-British Joint Liaison Group

St John's Building, 3rd Floor 33 Garden Road

Hong Kong

Telephone: (852) 868 2171/2416/2435 Facsimile: (852) 868 2431

HKB 091/3

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REGISTRY Action Taken

HONG KONG AND THE OECD

Thank you for your letter reference TIB CR 22/01/1 XVI of 12 July. I am sorry that I did not raise these concerns earlier: in fact I had not personally seen the papers, although I accept that the fault is ours, since they were in our office.

1.

However, the problem remains the same. It is a question of how the Chinese will react to what you want to do. This is a political, and not a legal problem. I accept that there is no obligation to consult them arising out of the assumption of an international obligation.

2.

3.

However, as you will know, we have in the past consulted them about the whole range of international organisations with which Hong Kong has any kind of official association with a view to agreeing with them on the post-1997 position. Many of these, if not the majority, were economic or trade related organisations, starting with the GATT. There is no doubt in my mind that the Chinese will expect to be consulted about the proposal for Hong Kong to enter into a new association with such an organisation at this stage if it is expected to persist beyond 1997.

4.

The idea that we can "inform them" without consulting them is to my mind not viable. If we do inform them, they are virtually certain to demand that we consult them. If we then refuse to do so, they will certainly adopt a hostile stance to what you are trying to do, and seek to frustrate it if they can. I do not know if they could succeed in that, but I imagine that if they were to make a demarche to OECD members to the effect that Hong Kong's proposal was made without their agreement and that it could not last beyond 1997, it might well affect the attitude of other OECD countries to your proposal.

/ 5.

CONFIDENTIAL