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Hong Kong risks losing US trade privileges under proposed law

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Senior US lawmakers have introduced legislation aimed at pressuring Hong Kong to shelve an extradition bill that critics say would further erode the autonomy that the former British colony was guaranteed on its handover to mainland China.

The move comes after nearly 100 people were injured in Hong Kong on Wednesday in clashes between riot police and protesters trying to stop the city’s de facto parliament, the Legislative Council, from debating the bill.

Members of the US Congressional-Executive Commission on China — led by Democratic congressman Jim McGovern and Republican senator Marco Rubio — introduced a measure that would require the US secretary of state to certify every year that Hong Kong remained autonomous from mainland China. Failure to certify would mean that Hong Kong would lose certain trade-related privileges with the US that are not enjoyed by mainland China.

The Hong Kong Human Rights and Democracy Act would also require the US president to determine who was responsible for the abductions and renditions to mainland China of Hong Kong booksellers and businessmen.

The legislation against the extradition bill, which Hong Kong’s government argues is needed to plug a loophole favouring criminal fugitives in the territory, would also require the US commerce department to issue an annual report to determine if the trading and financial hub was enforcing US regulations on the export of sensitive technologies.

“As over 1m Hong Kongers take to the streets protesting amendments to the territory’s extradition law, the US must send a strong message that we stand with those peacefully advocating for freedom and the rule of law and against Beijing’s growing interference in Hong Kong affairs,” Mr Rubio said.

Mr Rubio and his co-sponsors introduced a similar bill two years ago but it did not have enough support to pass through the Senate foreign relations committee. The new version appears to have more chance of success since it was co-sponsored by Jim Risch, the Republican head of the foreign relations committee, and Bob Menendez, the top Democrat on the panel.

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Nancy Pelosi, the Democratic Speaker of the House, has also backed the legislation, which consists of companion bills in the House and Senate. On Thursday, she urged Donald Trump to raise the issue with President Xi Jinping as part of their trade discussions. The two leaders will meet at the G20 summit in Japan this month.

Larry Kudlow, the top White House economic adviser, on Thursday said: “I’m just asking a simple question here regarding the values, norms, structures, rules of the Chinese government hierarchy. Do they want the kind of liberalisation that we are pressing for on the trade front? When you see what’s going on in Hong Kong you kind of raise your eyebrows,” he added.

Highlighting the criticism of the extradition bill and the mounting anti-China stance in Congress, Republican senator Ted Cruz joined forces with Democratic senator Ed Markey to introduce separate legislation that would require the secretary of state to produce a report on how mainland China uses Hong Kong “to circumvent US export controls, customs duties, and sanctions, as well as conduct espionage and influence operations”.

The White House declined to comment on both of the congressional bills introduced on Thursday.

Bonnie Glaser, a China expert at the Center for Strategic and International Studies, said she expected lawmakers would take a tougher stance than they did during the 2014 Umbrella Revolution mass pro-democracy protests in Hong Kong, and that they would “lean on the administration” to adopt a harsher response.

“The much tougher posture that Congress has towards China will inevitably bleed over into how Congress views what is happening in Hong Kong — that the Chinese are not abiding by their commitment and are essentially threatening democracy in Hong Kong,” said Ms Glaser.

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Separately on Thursday, 661 trade association and companies — including retailers Walmart, Target, Ikea and J Crew — urged Mr Trump not to impose tariffs on the remaining $300bn in imports from China not currently hit with levies.

“The additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the US economy,” they wrote in a letter. “Broadly applied tariffs are not an effective tool to change China’s unfair trade practices. Tariffs are taxes paid directly by US companies . . . not China.”

Follow Demetri Sevastopulo on Twitter: @dimi



Via Financial Times

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