WTO rules for Hong Kong in its trade dispute with US
- World Trade Organization panel finds that US broke trade rules in forcing Hong Kong goods to be relabelled ‘Made in China’
- US rejects the ruling, saying ‘we will not cede our judgment or decision-making over essential security matters to the WTO’
The United States broke global trading rules by requiring that goods from Hong Kong be labelled “Made in China”, the World Trade Organization found on Wednesday.
Following Beijing’s crackdown on democracy protests in Hong Kong, the US in August 2020 said that goods from Hong Kong, which is a WTO member in its own right, would have to be relabelled to gain entry to its ports - a move intended to underscore the financial hub’s status as “just another Chinese city” in Washington’s eyes.
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Hong Kong rejects US rule for ‘Made in China’ labels
However, a panel of WTO judges found that this violated US commitments to the global trade organisation. Under Article IX: 1 of the General Agreement on Goods and Tariffs (GATT), members must ensure that marking requirements do not disadvantage firms from other WTO members.
The US argument that the relabelling was necessary to protect its “essential security interests” did not hold water with the judges.
While there was evidence of the US “and other members being highly concerned about the human rights situation in Hong Kong”, the panel ruled, the situation had not yet “escalated to a threshold of requisite gravity to constitute an emergency in international relations” that would permit such behaviour.
The US “strongly” rejected the ruling, criticising it as a “flawed interpretation and conclusions”, according to a statement from Adam Hodge, a spokesman for the office of the United States trade representative.