U.S. and Hong Kong (2006)

U.S. Mission to the United Nations in Geneva

TRADE POLICY REVIEW OF HONG KONG, CHINA

Statement by Ambassador Peter F. Allgeier
U.S. Permanent Representative to the WTO

Geneva,
December 13, 2006

Thank you, Madam Chair.

The United States warmly welcomes Ms. Yvonne Choi, Permanent Secretary of Commerce and Industry and the entire delegation of Hong Kong, China. The United States is pleased to participate in Hong Kong's fifth Trade Policy Review. We appreciate the Secretariat's report, which provided us a detailed review of developments in Hong Kong, China's economic and trade policy. We also appreciate Hong Kong, China's openness and transparency in this review, as well as its excellent report. Finally, we would like to thank the discussant, Ambassador Mario Matus of Chile, for his insightful remarks analyzing the attributes of Hong Kong's trade policies.

Hong Kong, China has maintained a long established policy of openness to both trade and investment and has demonstrated its continuing commitment to the importance of the WTO, to which Hong Kong, China consistently contributes significant leadership as evidenced by Ambassador Tony Miller's Chairmanship of the Negotiation Group on Trade Facilitation. Just one year ago, Hong Kong did a superb job hosting the WTO Ministerial Conference. The United States applauds and envies Hong Kong, China's commitment to free market principles underlying its trade and investment policies.

The United States has benefited from a very strong and growing trade and economic relationship with Hong Kong, China. Bilateral goods trade between the United States and Hong Kong, China totaled $25.2 billion in 2005. Services trade between the United States and Hong Kong, China has increased by 79 percent since the end of the Uruguay Round, from $4.8 billion to $8.6 billion. U.S. foreign direct investment in Hong Kong, China was $37.9 billion in 2005, an 8.7 percent increase from 2004. We look forward to continuing this productive and strong relationship.

We appreciate Hong Kong, China's constructive approach to the WTO as an institution and in the DDA. Hong Kong, China's leadership in the services negotiations during the preparations for the Hong Kong Ministerial, was particularly helpful. In addition, we welcome the position that Hong Kong, China has taken on the importance of industrial market access as a Friend of Ambition and as an active advocate of sectorals.

Hong Kong, China's active participation in the WTO to promote open trade is a challenge and an example for the liberalization efforts of countries in the region and around the world. Hong Kong, China is also a leading member of APEC and has supported several initiatives to promote close economic cooperation in the Asia-Pacific region. The United States looks forward to Hong Kong, China's continued contribution, by its example and leadership at the WTO, to the further strengthening of the multilateral rules-based trading system.

Despite this commendable record, there are some areas in which Hong Kong, China could make further improvements. Continued efforts in these areas would increase efficiency in the Hong Kong economy and strengthen the basis for sustained economic growth.

In particular, we urge Hong Kong, China to continue to take steps to strengthen its IPR regime. In many respects, Hong Kong, China is a model for IPR protection in the Asia region. With its three-pronged focus on IPR legislation, enforcement, and public-awareness, it has done an admirable job in its efforts to eliminate the production of pirated and counterfeit products in Hong Kong, China. However, it remains vulnerable to copyright piracy and the dissemination of imported counterfeit products. We urge the government of Hong Kong, China to take necessary steps to ensure the promulgation of a Copyright Amendment, currently under review, which will strongly uphold principles of IP protection and underscore that violations, such as end user piracy, are criminalized. We also note some weaknesses in trademark protection, particularly with respect to company registration procedures. We urge Hong Kong, China to improve its enforcement efforts at the border to guard against imports of pirated or counterfeit products for transshipment or sale in the Hong Kong market. Finally, we urge Hong Kong, China to streamline its pharmaceutical approval policy to allow marketing of new medicines on a timely basis in Hong Kong, China.

I was surprised to read in the Secretariat's report that the scope of Hong Kong's tariff bindings remains low, at 42.8 percent of all tariff lines (or 56.5 percent of the total value of imports in 2005). We encourage Hong Kong, China to establish 100 percent tariff bindings. It would be an important example to all.

Services are the largest component of the Hong Kong, China economy, and the United States commends Hong Kong, China on the service sector liberalizations that it has accomplished since its last review in 2002, including in telecommunications. We look forward to Hong Kong, China's withdrawal of its interconnection policy for local fixed-line telecommunications services by June 30, 2008, which will allow the negotiation of interconnection charges between the operators concerned.

We have provided detailed questions and comments on the report for Hong Kong, China's consideration and look forward to reviewing the responses, which will further enhance our understanding of the future direction of Hong Kong, China's trade policy.

Madam Chair, Hong Kong, China is one of the most open economies in the world, a strong proponent of free trade, and a leading member of the WTO. We hope this Trade Policy Review will help Hong Kong, China build further on its strong record of contributions to the world trading system and that it will prompt all of us to reflect on the lessons from Hong Kong's success resulting from its free trade policies.

Thank you.