global trade

US blocks Hong Kong’s escalation of WTO trade dispute

US blocks Hong Kong’s escalation of WTO trade dispute

NATIONAL DAY. Members of the Hong Kong Police Honour Guard raise flags during a flag-raising ceremony marking China's National Day at Golden Bauhinia Square in Hong Kong, October 1, 2020.

File photo by Lam Yik/Reuters

The so-called 'Made in China' dispute is over a US rule stipulating that goods from Hong Kong now be marked as coming from China

The United States on Monday, January 25, blocked a decision by Hong Kong to escalate a Trump-era trade disagreement at the World Trade Organization (WTO), in its first meeting on disputes at the Geneva-based body since US President Joe Biden’s inauguration.

Speaking at the WTO’s closed-door dispute settlement body, the US delegate opposed Hong Kong’s decision to escalate the dispute by creating a WTO panel to rule on it, according to a copy of the speech.

However, Washington can only block it once and Hong Kong, a member in its own right at the 164-member body, can raise it again at the WTO next month.

The so-called “Made in China” dispute, opened by Hong Kong on November 3, is over a US rule stipulating that goods from the special administrative region of China now be marked as coming from China.

This requirement was announced by US Customs and Border Protection in August, breaking with a former policy that allowed Hong Kong to be named as a place of origin.

The closed-door meeting of the WTO’s dispute settlement body on Monday was Washington’s first chance to weigh in on long-standing active trade disputes as well as deadlocked talks over revamping the WTO’s top appeals bench.

Under former president Donald Trump, Washington blocked new judge appointments to the Appellate Body in a bid to force through reforms and paralyzed its functions. However, the administration signaled no change in its position on the body at the Monday meeting and declined to support a proposal to appoint new judges.

While Biden’s administration has officially taken over trade policy, observers say they do not expect any big changes until after Biden’s trade nominee, Katherine Tai, is confirmed.

At the same meeting, South Korea filed an appeal against a WTO panel ruling from November which largely backed Japan in a dispute over steel duties, alleging “serious errors” in those findings.

However, it joins 16 other cases currently in legal limbo at the WTO appeals bench. Japan said in a statement it was “highly disappointed” by Seoul’s decision to appeal. –

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