Jun 04, 2020

Bhala: Pompeo's announcement on Hong Kong could change trade relations

Posted Jun 04, 2020 11:45 AM

By NICK GOSNELL

Hutch Post

HUTCHINSON, Kan. — U.S. Secretary of State Mike Pompeo announced last week that Hong Kong no longer maintains autonomy from mainland China, a move that could have significant ramifications in trade between the U.S. and Hong Kong, according to a University of Kansas law professor.

"Merchandise coming from Hong Kong has not been subject to the Section 301 Sino-American trade war tariffs," said Raj Bhala, the Brenneisen Distinguished Professor of Law at the KU School of Law. "Most of them have been at 25%. Some of them are at 7.5%."

That said, no timeline has been set as to when the trade status would change.

"There's some room for negotiation with the Chinese," Bhala said. "Also, you'll notice that the administration did not withdraw from the Phase One trade agreement. For better or worse, the U.S. has stuck with that agreement."

Pompeo cited mainland China’s recent announcement that it will impose national security legislation on Hong Kong as part of a series of efforts taken under President Xi Jinping that show the former British colony is no longer autonomous. Bhala notes that Hong Kong has not policed itself, either.

"In 1984, as you know, the British and the Chinese signed their joint declaration to preserve and to create a one country, two systems paradigm for the next 50 years," Bhala said. "Under the joint declaration, Hong Kong then adopted what was called the Basic Law. It is sort of its basic constitutional and legal framework, the Basic Law of Hong Kong. Article 23 of the Basic Law says that Hong Kong shall, on its own, pass national security legislation."

Hong Kong has failed to do that, the closest they came is in 2003, and that prompted street protests then. After the last round of protests this past year, China chose to pass the legislation that Pompeo has called into question. President Trump said he would take action last Friday, but the details of that action remain unclear.