Hong Kong, China has requested WTO dispute consultations with the United States concerning marks of origin requirements imposed by the US on goods produced in Hong Kong, China. The request was circulated to WTO members on 3rd November.
Hong Kong, China is challenging several US legal, regulatory, executive, and administrative measures through which goods produced in “Hong Kong” allegedly must be marked to indicate that their origin is “China” for the United States’ origin marking requirement.
Request for consultations
The request for consultations formally initiates a dispute in the WTO. Consultations allow the parties to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
Background of the complaint
On 11th August 2020, the U.S. Customs and Border Protection (USCBP) published a notice that, after 25th September 2020, goods produced in Hong Kong must be marked to indicate that their origin is “China” for the origin marking requirement outlined in Section 304 of the Tariff Act of 1930, 19 U.S.C. & 1304.
By subsequent notice, the USCBP extended the date for compliance with this requirement to 10th November 2020.
Section 304 of the Tariff Act of 1930 requires articles of non-U.S. origin imported into the United States to be marked “in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article”.
Before the imposition of the revised origin marking requirement as announced in the notice published on 11th August 2020, the United States required, and therefore permitted, goods produced in Hong Kong, China to be marked to indicate that their origin is “Hong Kong”.
The United States’ prior treatment of goods of Hong Kong, China origin was consistent with the fact that the United States generally permits goods originating within the territory of other WTO Members, including separate customs territory Members, to be marked with the English name of that territory.
The USCBP published the notice on 11th August 2020 according to the “Executive Order on Hong Kong Normalization” signed by the President of the United States Donald J. Trump on 14th July 2020. The Executive Order suspends the application of Section 201(a) of the United States-Hong Kong Policy Act of 1992, 22 U.S.C. & 5721(a), to a variety of U.S. statutes, including Section 304 of the Tariff Act of 1930.
Under Section 201(a) of the United States-Hong Kong Policy Act of 1992, the laws of the United States apply to Hong Kong, China in the same manner as those laws applied to Hong Kong before the resumption of the exercise of sovereignty by the People’s Republic of China on 1st July 1997.
Unless the President of the United States determines and issues an Executive Order that Hong Kong, China “is not sufficiently autonomous to justify treatment under a particular law of the United States … different from that accorded the People’s Republic of China”.
The suspension of Section 201(a) of the United States-Hong Kong Policy Act of 1992 as it applies to Section 304 of the Tariff Act of 1930 is the legal basis upon which the USCBP ordered that goods produced in Hong Kong “may no longer be marked to indicate ‘Hong Kong’ as their origin, but must be marked to indicate ‘China’“.
