HK stance on trade dispute explained

May 28, 2021

The Hong Kong Special Administrative Region Government today filed its first submission to a World Trade Organization (WTO) panel to consider the dispute raised by the city in respect to the violation of WTO rules by the US’ requirement on origin marking for Hong Kong products.


The submission explains in detail that the US' requirement, amongst others, unlawfully discriminates against goods of Hong Kong origin, and is inconsistent with multiple WTO covered agreements, including the Agreement on Rules of Origin, the Agreement on Technical Barriers to Trade and the General Agreement on Tariffs & Trade 1994.


Secretary for Commerce & Economic Development Edward Yau said: "Hong Kong is a founding member of the WTO by virtue of the Marrakesh Agreement Establishing the World Trade Organization. Under the Basic Law, Hong Kong is a separate customs territory, and may, using the name ‘Hong Kong, China', participate in relevant international organisations and international trade agreements.


“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."


Noting that the US has imposed a discriminatory and unjust requirement for political reasons unrelated to a proper determination of the place of origin of the goods as required under various WTO covered agreements, Mr Yau said the US approach improperly interjects political considerations into a purely technical exercise to determine a product's origin under WTO rules.


“This approach, if accepted, would undermine the critical role that accurate origin determination plays within the rules-based multilateral trading system."


The requirement to mark goods originating in Hong Kong as originating in another WTO member has also increased the cost and complexity of exportation for Hong Kong enterprises by forcing them to segregate their products based on different markets of destination, putting them at a competitive disadvantage relative to other WTO members, Mr Yau added.

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