HK formally demands US drops ‘Made-in-China’ labelling regulations by Trump

17-Sep-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Hong Kong has formally written to Washington demanding it drops new regulations requiring locally made products exported to the US to be labelled “Made In China”, saying the city could take the matter to the World Trade Organisation.

Secretary for Commerce and Economic Development Edward Yau Tang-wah reiterated on Wednesday that the sanctions were unreasonable, saying he had asked the US consulate in Hong Kong to convey a letter to trade representative Robert Lighthiser making clear the city’s opposition to the move.

Yau also said he instructed the city’s trade offices in the United States and representatives at the WTO to convey the same message to the American side.

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“Depending on the response, we reserve our right to take the matter forward, including the dispute settlement system under the WTO,” Yau said at an afternoon press conference. Hong Kong is an independent member of the global trade body.

On the chance of success, Yau said: “It’s an issue of principle as well as Hong Kong’s interest and the business sector’s interest. It’s also about Hong Kong’s status as a WTO member. If one side imposes unreasonable measures against another member, it has implications for all WTO members.”

Yau last month said the city government was exploring alternatives to get around the new rules, citing as an example the possibility of “Made-in-Hong Kong, China” labels.

As part of US President Donald Trump’s executive order terminating the special treatment the city enjoyed under the Hong Kong Policy Act of 1992, his administration last month stipulated that local exporters must relabel locally produced goods as “Made in China”.

The move came in response to Beijing’s June 30 imposition of a sweeping national security law on the city.

The enforcement deadline was originally set for September 25, but was later extended to November 9 to allow accounts and importers more time to prepare.

The new rules, however, do not affect the status of products’ place of origin, meaning goods made in Hong Kong are not subject to the same punitive tariffs the US has imposed on Chinese goods during the trade war that has raged since the summer of 2018.

The US is the second-largest destination for Hong Kong-made shipments, accounting for 7.7 per cent of the city’s total domestic exports in 2019, with the mainland being the biggest destination.

In 2019, Hong Kong exported $471 million worth of locally produced goods to the US, most of which were jewellery, food, electronic goods and appliances. Those shipments, however, accounted for just 0.1 per cent of the city’s total exports.

Yau on Wednesday acknowledged the export of Hong Kong-made products to the US made up a small percentage of the total, but added: “For some enterprises, if they rely much on the US market, the impact can be big. We believe in free society and rules-based systems and international trade agreements. [WTO] members, no matter how small or strong, should be respected.”

The city’s roots in manufacturing run deep, with the made-in-Hong Kong label once a familiar sight around the world on everything from toys to cheap electronics. But with China’s open-door policy in the late 1970s, factories began shifting across the border, lured by cheap labour.

Hong Kong in turn began to focus on service industries, setting down a path that would eventually transform the city into a global financial hub.

The city was home to about 7,400 manufacturing companies in 2018, down by 2.65 per cent from the year before.


Category: Hong Kong

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