Carrie Lam File Photo: VCG

WTO experts said that US sanctions on Hong Kong are in serious violation of the rules of the international trade body after Hong Kong Special Administrative Region (HKSAR) Chief Executive Carrie Lam Cheng Yuet-ngor said Tuesday that Hong Kong will lodge a complaint to WTO against the US' new requirement that Hong Kong products must be labeled as "Made in China".

"Hong Kong is a separate member of the WTO. To be mistreated by another member of the WTO breaches the rules and regulations of this international body," Lam told reporters at a briefing before an Executive Council meeting.

Chinese experts well-versed in WTO affairs pointed out that the US has seriously violated WTO rules when it comes to its sanctions on Hong Kong.

Imports from Hong Kong to the US will be labeled "Made in China" instead of "Made in Hong Kong" from September 25, according to a notice published last week by the US Customs and Border Protection, Department of Homeland Security.

The US violates multiple WTO rules by labeling "Made in Hong Kong" goods as "Made in China", Hu Jianguo, a professor at Tianjin-based Nankai University, told the Global Times on Tuesday.

"Currently, Hong Kong and the US trade with each other on the basis of 'most-favored nation (MFN)' tariffs. If the US imposes a new label requirement for Hong Kong products, it risks violating two WTO provisions - tariff reduction commitments and MFN treatment," Hu said.

If the US implements its label change, experts said goods from the Hong Kong face potential tariff rates of 7.5-25 percent, a marked increase from the average 3.5 percent currently charged.

"Hong Kong is actively putting forward a strong argument against US actions that damage the city's rights and interests," said Huo Jianguo, vice chairman of the China Society for World Trade Organization Studies.

The US' trade sanctions on Hong Kong have no legal basis, and it will constitute blatant discrimination if carried out as announced, Huo said, noting that Hong Kong could move to curb imports of certain US goods in retaliation.

Last week, Hong Kong commerce secretary Edward Yau Tang-wah slammed the US actions as "barbarian" and estimated that the impact of the US' move on Hong Kong's exports will not be too big, given that the city's exports of goods to the US stand at  about HK$4 billion ($516 million) annually. 

Yau said some companies and industries may be affected.

Chinese experts pointed out that, with a few exceptions, there is a set of requirements on rules of origin under the WTO framework that apply to all members, and it does not matter why they are applied. 

"The US randomly changes the rules of origin it applies to Hong Kong, which violates the WTO rules in this regard," Hu said, noting that the enactment of the national security law for Hong Kong does not affect its position as a separate customs territory in the WTO.

"The US cannot unilaterally revoke special tariff treatment for Hong Kong, let alone alter Made-in-Hong Kong product labels under WTO rules," he said.

Amid the continued spread of the COVID-19 pandemic globally and the escalation of China-US tensions, Hong Kong saw year-on-year decreases in the first half of this year in exports to most of its major destinations. There was a decline of 26 percent to India, one of 23.9 percent to the US, and one of 21.6 percent to Germany, data from Hong Kong's Census and Statistics Department showed in July.

The US sanctioned 11 officials from the Chinese mainland and Hong Kong over the enactment of the national security law in the city.

Experts warned that more outrageous actions could be taken by the White House as the US presidential election nears. 

"US officials around President Donald Trump are even more reckless than the president," an observer said.