WTO rules against US in Hong Kong labelling dispute

THE World Trade Organization found on Wednesday (Dec 21) that the United States had violated global trading rules by insisting that imports of products from Hong Kong be marked as coming from China.

Until 2020, the United States had treated Hong Kong, which is a separate WTO member, in the same manner as before it passed from British control in July 1997.

Then US President Donald Trump signed an order requiring that be changed, with Washington arguing that the Chinese territory was not sufficiently autonomous to justify treatment different from that of China. The order came into effect in Sep 2020.

A three-person WTO panel found that the United States violated an obligation towards Hong Kong, by giving it less favourable treatment than other WTO members in terms of marks of origin on its products.

The United States said it had applied an exception allowing for measures to protect a country’s “essential security interests”.

The panel acknowledged that tensions had increased between the United States and Hong Kong, but said these had not risen to an “emergency in international relations”, the threshold required to apply the exception.

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The panel concluded its 96-page report by saying that the United States should bring its measure into conformity with global trading rules.

The US has rejected the WTO finding by insisting that imports of products from Hong Kong be marked as coming from China, the office of US Trade Representative Katherine Tai said.

“To be clear, the United States does not intend to remove the marking requirement as a result of this report, and we will not cede our judgment or decision-making over essential security matters to the WTO,” the USTR office said in a statement. REUTERS