WTO ruling on U.S. labeling ban welcomed

Central authorities and Hong Kong society welcomed on Thursday a World Trade Organization arbitrators' ruling that a United States policy banning a "Made in Hong Kong" label on goods produced in the special administrative region and exported to the U.S. violated the trade body's rules.

They said the finding, made by an expert panel of the global trade group's Dispute Settlement Body, is fair and just and safeguards the Hong Kong Special Administrative Region's status as a separate customs territory. They urged the U.S. to abide by the decision and remedy the situation as soon as possible.

Since Nov 10, 2020, the U.S. has required that all products exported from Hong Kong to the U.S. no longer be marked as originating in "Hong Kong", but must be marked "Made in China" instead. Following a swift and robust objection from the Hong Kong SAR's government, the WTO's Dispute Settlement Body agreed in February last year to establish a panel to handle the dispute.

The panel submitted a report on Wednesday, saying that the U.S. is acting inconsistently with the most-favored-nation treatment requirement in respect to origin marking under the 1994 General Agreement on Tariffs and Trade.

Hong Kong Financial Secretary Paul Chan Mo-po said it was unreasonable for the U.S. to impose such a labeling ban. He said the SAR government, therefore, had to take steps to reverse the ban by taking the issue to the WTO — even though the U.S. requirement has had little impact on Hong Kong, which is mainly a transit port for mainland goods and a service-center city.

Algernon Yau Ying-wah, secretary for commerce and economic development of the HKSAR, said at a news conference on Thursday that he had written to the U.S. trade representative, urging the U.S. to respect the ruling and immediately withdraw the labeling ban.

"We welcome that the panel has fully affirmed the status of the Hong Kong SAR, China as a separate customs territory. The ruling has once again confirmed that the U.S. has disregarded international trade rules, attempted to impose discriminatory and unfair requirements unilaterally, unreasonably suppressed Hong Kong products and enterprises, and politicized economic and trade issues," Yau said.

Calling the labeling ban "politically motivated and a vain attempt to interfere with Hong Kong's internal affairs through weaponizing trade," Yau said it completely disregards the rules-based multilateral trading system and irresponsibly infringes on Hong Kong's rights as a member of the WTO.

The Ministry of Commerce also welcomed the ruling on Thursday, saying it hoped the U.S. will respect the finding, take steps to remedy the situation, and safeguard the rules-based multilateral trading system and normal trade order.

The Foreign Ministry and the Office of the Commissioner of the Ministry of Foreign Affairs of China in the Hong Kong SAR weighed in on the arbitrators' decision.

Foreign Ministry spokeswoman Mao Ning, at a news conference in Beijing on Thursday, said Hong Kong's status as a separate customs territory is recognized by the WTO's multilateral rules.

Mao said the U.S. labeling requirement not only violates WTO rules, but also goes against the U.S.' own interests.

The spokesperson of the commissioner's office said the U.S. move, with the real intention of vilifying "one country, two systems", smacks of typical power politics and hegemony.

The arbitrators' finding was well-received by Hong Kong's leaders and leading business groups, including the Chinese Manufacturers' Association of Hong Kong and the Federation of Hong Kong Industries.

Calling the U.S. requirement an attempt to use Hong Kong as a bargaining chip in China-U.S. trade disputes, Dennis Ng Wang-pun, president of the Chinese Manufacturers' Association of Hong Kong, said that products made in Hong Kong are widely recognized outside the city, including foods and pharmaceutical products.

Exports of Hong Kong-manufactured goods to the U.S. last year amounted to about HK$7.4 billion ($949 million), or about 0.1 percent of Hong Kong's total exports, so the impact on local manufacturers is not significant, said Steve Chuang Tzu-hsiung, executive deputy chairman of the Federation of Hong Kong Industries.