FRENCH and Hongkong officials have held talks on a proposed bilateral trade agreement to reassure investors in the run-up to 1997. The Investment Protection and Promotion Agreement (IPPA) aims to encourage and protect investments on both sides. The French Trade Commission and Hongkong's International Law Division met recently to discuss the terms of the agreement, which will require the approval of Beijing. Although investment activity between France and Hongkong has not yet suffered, establishing bilateral warranties for investments will ease potential anxiety concerning future Chinese fiscal measures - for example, protection against expropriation. ''The IPPA will simply promote investment and guarantee fair, equitable, consistent principals in an effort to minimise the potential fear and apprehension of investors,'' said Mr Jean Francois Cirelli, offical envoy of the French Government. Mr Cirelli was in Hongkong last week to consult with regional law officer Mr David Edwards. Mr Cirelli explained that as 1997 approaches, investors wanted to know more about future and long-term investments in Hongkong. Although negotiations progressed quickly in Hongkong, Mr Cirelli said that French officials still needed to find a slot in the French legislative calendar so that voting on the IPPA could advance as planned. With French legislative elections in March, voting procedures risk being slowed down. After both the French and Hongkong Governments have signed the agreement, it will be immediately transferred to Beijing, which will ultimately decide upon the realisation and speed of ratification. In compliance with The Basic Law and the Joint Declaration, all current investment negotiations between France and Hongkong must be accepted by Beijing before they can be ratified. Both French and Hongkong officials were confident that last week's bilateral conferences had been successful. ''I don't foresee any problems. The bilateral discussions have been very smooth and productive, and I see no reason why ratification should not realise within the next 18 months,'' Mr Cirelli said. Mr Edwards said: ''I think that the conferences were a success and believe that negotiations should close by the end of the year.'' Hongkong is currently conducting similar negotiations with several other international investors. Mr Edwards said the territory had initiated agreements with nine countries. He said China had approved, but not yet signed, accords between Hongkong and Canada. ''Negotiations between Hongkong and The Netherlands, however, have been recently approved and signed,'' he said.