"The Past and Present of Hong Kong's Separate Customs Area"

2020 08/25

The US government's cancellation of Hong Kong's status as a separate customs territory has aroused concern from all walks of life. A separate customs area is a special concept in the WTO that refers to a region with a high degree of autonomy in trade and the implementation of separate customs tariff rules and trade rules. This concept originated from the fact that when GATT was drafted, the overseas colonies of great powers such as Britain were created by the need to participate in GATT. Since the individual customs area has no sovereign nature and does not have the capacity to conclude treaties internationally, the GATT requires the participation of the separate customs area in the GATT from the very beginning, and it must be recommended by the member states that are internationally responsible for the region and issue a statement confirming the trade autonomy of the region. Hong Kong became a GATT party in the eighties of the last century through the recommendation and declaration of the British government, and has been a member of the WTO ever since. The US announcement of the abolition of Hong Kong's separate customs territory is a unilateral act and cannot change Hong Kong's status in the WTO. Since WTO members all reduce taxes and trade in services with each other, unilateral acts of the United States may lead to the suspension of mutual concessions between the United States and Hong Kong in the WTO. In particular, the services sector in each other's markets will likely be affected by the suspension of concessions. Given the size of the US services trade market in Hong Kong, the US move is particularly damaging to itself.


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(This article is translated by software translator for reference only.)