UK Addresses Hong Kong's Trade Policy in WTO Review 2023

Chair, let me join others in welcoming the delegation from Hong Kong, China, led by Director-General of Trade and Industry, Ms. Wong. Let me also express my gratitude to the wider delegation, ably led in Geneva by Permanent Representative Miss So, and to colleagues from the WTO Secretariat for their respective reports; to the Chair, as ever; and to our Discussant for his comments.

Chair, the UK and Hong Kong, China enjoy people-to-people, cultural, and trade ties. UK companies continue to operate in Hong Kong, China, valuing its historic reputation for strong institutions and respect for the rule of law, its open and predictable business environment, and its status as a global financial centre.

Hong Kong, China is the UK's 13th largest trading partner. Our total trade in goods and services has reached almost £30 billion in 2023. It is our second largest market for goods in Asia-Pacific, after mainland China. And it was the destination for almost £80 billion of UK Foreign Direct Investment in 2021.

However, despite Hong Kong, China's commitment to free trade, there remain untapped opportunities, such as the 100% ad valorem excise tax that it places on beverage alcohol products, which are over 30% alcohol by volume. Not only has this tax led to significant price disparities between wine and spirits, but its ad valorem nature effectively penalises higher-value and higher-quality spirits.

Besides making British businesses very happy, a reduction in spirit taxation would help to support the recovery of Hong Kong, China's hospitality and tourism industry. It would also enhance the restaurant scene that makes Hong Kong, China one of the world's gastronomic gems, allowing diners to responsibly enjoy the best of UK gin, Scotch whisky, or any other of the countless high-quality UK spirits.

And yet, Chair, despite the myriad of global trade challenges we face, the current trading relationship between Hong Kong, China and the UK remains strong. One of the most significant reasons for this is our shared commitment to free and open trade, which is underpinned by our historical ties. As promised in 1997, Hong Kong, China remains a separate customs territory, retains its free port status, and does not levy tariffs on the import of goods.

Chair, Hong Kong, China is a valued member of the WTO. Its strength rests on the reputation and integrity of its institutions, its independent regulators, and the independence of its Common Law Legal system, which offers effective dispute resolution systems in commercial cases to high standards. They are a fundamental part of why UK businesses continue to choose to operate in Hong Kong, China.

The UK's strong interest in seeing Hong Kong, China prosper is evidenced in the promises we made, together with China, in the Sino-British Joint Declaration of 1984. The Joint Declaration guarantees the continuation of Hong Kong, China's high degree of autonomy, social and economic systems, lifestyle, and rights and freedoms for 50 years from 1997. The UK remains committed to ensuring that these promises, made by both countries, are upheld.

However, China is now in an ongoing state of non-compliance with the Joint Declaration. Hong Kong, China's capitalist economic, monetary and financial systems remain distinct and robust, but actions taken by China, such as the imposition of the National Security Law, as well as the actions taken by the authorities of Hong Kong, China, continue to erode many of the civil and political rights guaranteed in the Joint Declaration and Hong Kong, China's Basic Law.

This, in turn, puts at risk confidence in the effective governance, fair judiciary, and independent regulation, which makes Hong Kong, China such a great place to do business. Given Hong Kong, China's significant role as a regional trade and economic hub, these actions also risk harming China's own economic development in the long term.

The UK therefore maintains that unwavering commitment to upholding the promises made in the Sino-British Joint Declaration is not only the best way to support our own trading relationship, but also the best way to safeguard its long-term prosperity and ensure that Hong Kong, China continues to be a crucial part of the world economy.

Chair, I would like to conclude by welcoming the role that Hong Kong, China plays in supporting the world economy through its full and active engagement within the WTO. The UK welcomes Hong Kong, China's participation in a range of Joint Initiatives, and most notably its recent efforts to help conclude substantive negotiations on Investment Facilitation for Development, as well as its ratification of the fisheries subsidies agreement. But like others, we were disappointed in the role that Hong Kong, China played in blocking consensus on selecting the Chair of the Government Procurement Committee. I hope that Hong Kong, China will continue to use its influence in the WTO to advance free trade; promote important reforms; and work together with other Members to conclude an ambitious fisheries agreement heading into Ministerial Conference 13.

Finally, as one of the three co-chairs of the Informal Working Group on Trade and Gender, let me also welcome Hong Kong, China's initiatives to promote women's empowerment, such as the Women Empowerment Fund, and thank them for providing further information on the role of the Women's Commission in their answers to our Advanced Written Questions.

Thank you, Chair, and Discussant for facilitating this Trade Policy Review, and to the delegation of Hong Kong, China for its full cooperation with this important exercise in transparency.