Hong Kong WTO Membership Could Complicate Move to End Its Customs Status

While the U.S.-Hong Kong Policy Act of 1992 gives the president clear authority to terminate Hong Kong's special status if China violates the island's autonomy, the fact that Hong Kong has its own membership in the World Trade Organization could complicate the matter, the Congressional Research Service says. In a June 5 “legal sidebar,” CRS said that not only is it not clear when the administration would end Hong Kong's special trade status, it's also not clear whether the U.S. would say it no longer acknowledges Hong Kong's membership in the WTO.

Under WTO rules, Hong Kong goods could face the same standard tariffs as Chinese goods, but whether trade remedies such as Section 301 would be legal is less clear. “Hong Kong would not lose its membership due to any potential U.S. actions to revoke its trade privileges under U.S. law, and other WTO members are not required to adhere to a U.S. decision on the matter,” the research note said, so Hong Kong could initiate a dispute at the WTO if it believes the U.S. is breaking WTO norms.