Hong Kong has formally denounced at the World Trade Organization (WTO) a Trump administration regulation that goods made in the city for export to the US must be labelled as “Made In China”.
The “formal intervention” was made during a session on Tuesday of the WTO’s General Council, the Geneva institution’s highest-level decision-making body.
It comes after the Hong Kong government made an official written complaint to the Office of the US Trade Representative (USTR) in September, demanding Washington drop the new regulations, which were announced in August but have since been delayed until November 9.
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Laurie Lo, Hong Kong’s permanent representative to the WTO, took to the floor to request the US drop the new labelling requirement, urging the country to “honour its commitment and responsibility as a WTO member” and ensure it complied with WTO rules.
Hong Kong, China expresses our strong objection to the revised origin marking requirement imposed by the US
“Hong Kong, China expresses our strong objection to the revised origin marking requirement imposed by the US,” Lo said in the statement.
“We have already written to request the US to withdraw such measure with immediate effect and invite the US for bilateral discussions with a view to resolving the matter in our mutual interests. Regrettably, the US has so far not withdrawn the measure.”
He added that if the US fails to “address our concerns over its revised origin marking requirement, Hong Kong, China is determined to defend its legitimate rights and interests in accordance with the dispute settlement procedure under the WTO”.
The US made a follow-up intervention at the meeting in response to Hong Kong’s statement, a spokeswoman for the Hong Kong government told the South China Morning Post, in which it said it was currently reviewing Hong Kong’s concerns and would respond to the demands once the review was complete.
Hong Kong has not yet launched a formal WTO case against the US, but the statement is the strongest signal yet that it plans to do so.
Julien Chaisse, a trade law professor at City University of Hong Kong, said although formal objections were “nothing spectacular”, it showed the city was moving towards a case.
“I see this intervention as a formal political way to multilateralise the matter,” he said. “Now, the WTO and its members know about Hong Kong’s concerns and, implicitly, intentions.”
Henry Gao, associate professor of law at Singapore Management University, said the WTO’s General Council was “mainly a talk shop for discussing systemic issues rather than specific cases”.
“If they really want to bring a dispute they’d request a bilateral consultation with the other party directly,” he added.
The US announced the change to labelling requirements in August in response to Beijing’s imposition of a sweeping national security law that has raised questions about Hong Kong’s autonomy. The move is part of a broader effort by Washington to strip the city of its special trading status.
Hong Kong also no longer enjoys unfettered access to sensitive technology due to US export controls on China being broadened to include Hong Kong, while senior Hong Kong officials, including Chief Executive Carrie Lam Yuet-ngor, were added to a US sanctions list for “implementing Beijing’s policies of suppression of freedom and democratic processes”.
In its statement on Tuesday, Hong Kong said the US labelling requirement disregarded Hong Kong’s status as a separate customs territory and the regulation would impose unnecessary burden on businesses and customers in both jurisdictions.
Most legal scholars and trade experts agree that Hong Kong would have a case at the WTO. Others cautioned against “kicking the hornet’s nest” at a time when the US government was pursuing multiple punitive actions against China, and seemed ready to follow with more.
Hong Kong is the world’s eighth largest exporter and importer of goods, but the vast majority of the goods shipped in and out of the port are re-exports, either going to or from China.
Only 1 per cent of goods shipped from Hong Kong is made in the city, which instead serves as a logistical gateway with mainland China.
But the city among the few trading partners with which the US holds a trade surplus, even if that has fallen 51.9 per cent in the first nine months of 2020 to US$8.5 billion, according to US government data. In August, Hong Kong’s exports to the US were down 31.1 per cent compared to a year earlier, while imports from the US were down 25 per cent.
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This article Hong Kong lashes out at US ‘Made in China’ labelling rule at the World Trade Organization first appeared on South China Morning Post