Biden team backs Trump-era ‘Made in China’ rule for Hong Kong exports at World Trade Organisation

A US delegation said in a statement the international body had no right to mediate on the matter, because it ‘constitutes a threat to national security’

Before 2016, WTO members generally steered clear of defending their trade actions on the basis of security interests – until Donald Trump came along

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US President Joe Biden pictured at the White House on Monday. Photo: Bloomberg

Published: 9:29am, 23 Feb 2021Updated: 9:29am, 23 Feb 2021

US President Joe Biden’s administration dashed hopes for a softer approach to the World Trade Organization by pursuing a pair of his predecessor’s strategies that critics say risk undermining the international trading system.

The US delegation to the WTO, in a statement obtained by Bloomberg, backed the Trump administration’s decision to label Hong Kong exports as “Made in China” and said the WTO had no right to mediate the matter because the organisation’s rules permit countries to take any action to protect their “essential security interests”.

“The situation with respect to Hong Kong, China, constitutes a threat to the national security of the United States,” the US delegation said. “Issues of national security are not matters appropriate for adjudication in the WTO dispute-settlement system.”

Before 2016, WTO members generally steered clear of defending their trade actions on the basis of national security because doing so could encourage other nations to pursue protectionist policies that have little or nothing to do with hostile threats.

Former US President Donald Trump’s administration triggered a Cold War-era law to justify tariffs on imports of steel and aluminium in 2018. Photo: AFP

That changed in 2018, when the Trump administration triggered a Cold War-era law to justify tariffs on imports of steel and aluminium. In response, a handful of US trade partners, including Canada, the EU, and China filed disputes at the WTO and a ruling in those cases is expected later this year.

Since then, more nations – including Saudi Arabia, India, Russia and others – have cited the WTO’s national-security exemption in regional trade fights, leading trade experts to warn that such cases could erode the organisation’s ability to mediate disputes.

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