US urged to withdraw HK goods rule

September 16, 2020

Secretary for Commerce & Economic Development Edward Yau:

This morning I met the Acting US Consul General to Hong Kong & Macau and asked him to convey a letter that I present to the US Trade Representative asking the US to withdraw this new origin marking requirement immediately and also presenting our strong objection to it.

The basic reason for Hong Kong’s action is that such a requirement on origin marking goes contrary to World Trade Organization (WTO) regulations and also infringes (on) Hong Kong's rights as a separate customs territory and our rights under the WTO, so we take issue with that.

And we are also telling the US that such measures in fact go contrary to US-Hong Kong trade relations and are causing a lot of market confusion. So in parallel to what I did this morning, I have asked the Hong Kong Economic & Trade Office in Washington to convey the same message to our counterparts in the US administration.

Meanwhile, we also are asking our representative at the WTO in Geneva to convey the same message and request to the US representative at the WTO. Hong Kong takes the WTO and also the rule-based system very close to our heart because we are an independent and separate member of the WTO, and Hong Kong has always been a vocal voice in vanguarding the rule-based system. We believe that Hong Kong has an obligation to ask the US to uphold its obligation and responsibility under the WTO. So, depending on the response from the US, we will reserve our rights under the WTO in taking the matter forward, including (taking action under the) dispute settlement mechanism.

(To watch the full media session with sign language interpretation, click here.)

The Hong Kong Special Administrative Region Government today formally took issue with the United States Government over the new requirement in respect of the origin marking of Hong Kong products and requested that it be withdrawn immediately.

Speaking to the media this afternoon, Secretary for Commerce & Economic Development Edward Yau said he met Acting US Consul General to Hong Kong & Macau Paul Horowitz this morning and asked the US Consul General to Hong Kong to deliver his letter to the US Trade Representative, expressing the Hong Kong SAR Government's position that it strongly objects to the new requirement which was announced by US Customs & Border Protection on August 11 and requested that the requirement be immediately withdrawn.

The Hong Kong Economic & Trade Offices in Washington, DC, and Geneva also forwarded copies of Mr Yau's letter to the Office of the US Trade Representative and US Customs & Border Protection in Washington, DC, as well as to the Permanent Mission of the US to the World Trade Organization (WTO) in Geneva.

The Hong Kong Economic & Trade Offices will also arrange discussions with relevant US authorities.

Mr Yau said the new US requirement goes contrary to the WTO’s regulations and also infringes on Hong Kong's status as a separate customs territory and the city’s rights under the WTO.

"The US' unilateral and irresponsible attempt to weaken Hong Kong's status as a separate customs territory is highly inappropriate.

“Such a move also confuses the market and undermines the rules-based multilateral trading system. We will robustly advance our arguments to defend Hong Kong's interests."

He added as a responsible WTO member, Hong Kong always abides by its rules.

Mr Yau said the action taken by the Hong Kong SAR Government is in accordance with the WTO’s spirit and practices, adding it is an important step before taking action against the US under the WTO framework with a view to resolving the matter first at a bilateral level.

He said the Hong Kong SAR Government will follow up on the matter depending on the US response.

“If the US refuses to withdraw the requirement and bilateral discussions fail to reach satisfactory outcomes, the Hong Kong SAR Government will take action against the US in accordance with the WTO Dispute Settlement Mechanism to safeguard Hong Kong's interests under WTO rules."

According to the WTO Understanding on Rules & Procedures Governing the Settlement of Disputes, if a member believes that another member has violated WTO rules, the affected party may request consultations with the other party according to the understanding to resolve the matter.

If the parties fail to reach consensus through consultations, the complaining party may request the WTO Dispute Settlement Body to establish a panel to consider the dispute.

Mr Yau stressed that under "one country, two systems", Hong Kong is an inalienable part of the People's Republic of China, and the motherland confers through the Basic Law a special status to the Hong Kong SAR.

Pursuant to Articles 116, 151 and 152 of the Basic Law, the Hong Kong SAR is a separate customs territory and may, using the name "Hong Kong, China", participate in international organisations such as the WTO and Asia-Pacific Economic Cooperation as a separate member, and develop mutually beneficial economic and trade relations with economies around the world.

The special status of Hong Kong has been widely recognised and respected by the international community, and Hong Kong's economic and trade status is on par with that of other WTO members, Mr Yau added.