TNAG-2810-FCO40-4055-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 125

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Taiwan in respect of Hong Kong, they are also relevant to the EC's commercial policy towards Taiwan. Taiwan is presently going through the process of acceding to the GATT (as a separate customs territory, like Hong Kong). Once Taiwanese accession is completed, Taiwan will (rightly) expect to benefit from GATT principles of non-discrimination. Were trade in the relevant products to be banned on the basis of the option (b) argument in circumstances where Taiwan had indeed taken steps to bring its policies on CFCS into conformity th the requirements of the Protocol, a real and unnecessary onflict with our GATT obligations towards Taiwan would then arise. Better to get the option (a) interpretation in place now, with the option of taking firmer measures if Taiwan does not in fact follow appropriate policies, than find ourselves criticised for imposing a gratuitous (and thus probably GATT-illegal) trade ban at a time when we are emphasising to the Taiwanese (and the Chinese) that we will expect them to live up to their prospective GATT obligations.

Next steps

Were

You have explained that your Legal Advisers will be commenting, and that it will of course be necessary to persuade the Commission of the merits of our point of view, if the option (a) approach is confirmed. That is fine, but I would add that it might also be necessary and helpful to consult trade policy makers in other member states too. that considered to be the case, the Article 113 Committee would perhaps provide the appropriate forum. This Committee brings together senior trade policy officials from all member states and the Commission each week, to act as a regular forum and clearing house for exactly this sort of issue. Committee is already heavily engaged in supporting the

The Commission's work on the GATT accession negotiations for China and Taiwan, and is also regularly engaged on trade and environment issues. Please let me know if this is an approach you might wish to consider further.

your

Sufler

Ian Fletcher

сс

Mr Cooke

Mr Johnson ITP1

Ms Lamont ENV2a

by fax

Mr Wright UKREP

Mr Young UKMIS Geneva

Mr Smith ECD (E)

Mr Davies FED

Mr Bunten HKD

Mr Lee-Bapty c/GA3 DOE