FROM USHKPA TO HKHRDA AND HKAA: THE TURNINGS OF U.S.–CHINA POLICY AND THE END OF HONG KONG’S FULL AUTONOMY Mao-wei Lo* and Chien-Huei Wu** ABSTRACT This Article traces the evolution of U.S. law and policy toward Hong Kong—from the United States–Hong Kong Policy Act of 1992 (USHKPA) to the Hong Kong Human Rights and Democracy Act of 2019 (HKHRDA) and Hong Kong Autonomy Act of 2020 (HKAA). The USHKPA, enacted under the Clinton administration after the Tian- anmen massacre but before the handover of Hong Kong, is a product of the United States’ China policy, based on engagement. The USHKPA represented a compromise between Congress and the executive branch and reflected the nature of soft law, implementation of which is large- ly dependent on Executive discretion. After three decades of a policy of engagement and more than twenty years after China’s resumption of control over Hong Kong, the United States’ China policy has gradually changed, and it saw a significant turn under the Trump administra- tion. In the midst of U.S.–China tension and with bipartisan support from Congress, the HKHRDA and the HKAA strengthen the review, reporting, and sanctions mechanisms for human rights, democracy, and autonomy in Hong Kong. Nonetheless, the Trump administration’s decision to suspend Hong Kong’s preferential treatment under U.S. law, due to the erosion of the high degree of autonomy guaranteed by the * Mao-wei Lo is a JSD Candidate at Stanford Law School and was formerly a legal advisor at the Mainland Affairs Council in the Executive Yuan in Taiwan. ** Chien-Huei Wu is an Associate Research Professor at the Institute of European and American Studies of Academia Sinica. He obtained a PhD in Law from the European University Institute in 2009 and was formerly a district attorney in the Taipei Prosecutorial Office at the Ministry of Justice in Taiwan. 93 94 25 UCLA J. INT’L L. & FOR. Aff. (2021) Sino-British Joint Declaration and the Hong Kong Basic Law, poses questions about its legality and legitimacy under public international law and World Trade Organization (WTO) law. This Article argues that U.S. sanctions against individuals and entities who undermine Hong Kong’s human rights, democracy, and autonomy can be justified based on international human rights law given the sanctions’ limited scope, special designation, effectiveness, and proportionality. We also argue that the United States’ trade-related measures can be justified under the general exception—public morals— and the national security exception in the General Agreement on Tariffs and Trade (GATT). We observe that the United States’ termination of preferential treatment for Hong Kong based on its separate customs territory status covers four dimensions: rules of origin, tariffs, export control, and currency. We argue that even though there is little guid- ance from GATT and WTO law, historical and comparative approaches are helpful in evaluating whether Hong Kong still can sustain its WTO membership by virtue of its separate customs territory status. TABLE OF CONTENTS INTRODUCTION ..................................................................................................95 I. HONG KONG AS A SEpaRATE CUSTOMS TERRITORY: FROM COLONY TO SPECIAL ADMINISTRATIVE REGION .................................99 II. US LAW AND POLICY TOWARD HONG KONG: FROM USHKPA TO HKHRDA AND HKAA ...................................................................104 A. USHKPA: The Origin of Hong Kong’s Special Status under the U.S. Legal System .................................................................106 1. The History of the USHKPA ..................................................106 2. The Scope and Contents of the USHKPA ..............................108 B. HKHRDA: A Tiger With Teeth? ..................................................111 1. The History of the HKHRDA ................................................111 2. The Scope and Contents of the HKHRDA .............................113 a. The International Nature of the Hong Kong Issue and its Implications for Human Rights and Democracy ...113 b. Reinforcing the Reporting Provision and Introducing the Certification Mechanism ..............................................114 c. Visa Administration ........................................................... 114 d. The Establishment of a Sanctions Mechanism .................. 115 C. HKAA: Reinforcing Sanctions Mechanisms ...............................116 1. The Background of the HKAA .............................................. 116 2. The Scope and Contents of the HKAA .................................. 117 D. Trump’s Executive Order on Hong Kong Normalization............ 119 From USHKPA to HKHRDA and HKAA 95 1. Rules of Origin .......................................................................121 2. Tariffs .....................................................................................121 3. Export Control ........................................................................122 4. Currency .................................................................................123 E. From USHKPA to HKHRDA and HKAA, and the Executive Order: Strong Signals Delivered by the United States? ..........................124 III. THE LEGALITY OF U.S. SANCTIONS AGAINST HONG KONG HUMAN RIGHTS ABUSERS ...............................................................................................125 A. Unilateral and Multilateral Economic Sanctions .........................127 B. Various Types of Sanctions Under HKHRDA, HKAA, and the Executive Order ..............................................................129 1. Nontrade-Related Sanctions: The Interplay Between the Principle of Non-intervention and Sanctions as a Human Rights Intervention .............................................130 2. Trade-Related Sanctions: A Struggle Between the Values of Human Rights Protection and Trade Liberalization ...........134 a. GATT Article XX(a): The Public Morals Exception .........137 b. GATT Article XXI:(b)(iii): The Security Exception .........141 C. Summary: What Will Be the Next Steps for the United States? .144 IV. THE LEGALITY OF THE UNITED STATES’ UNILATERAL REVOCATION OF HONG KONG’S SEpaRATE CUSTOMS TERRITORY STATUS .......................145 CONCLUSION ...................................................................................................154 INTRODUCTION On November 27, 2019, former U.S. President Donald Trump signed the Hong Kong Human Rights and Democracy Act of 2019 (HKHRDA) into law, which required the United States to impose sanctions against human rights abusers in Hong Kong and to consider revoking its separate customs territory status.1 In response, on Novem- ber 28, 2019, the Vice Minister of Foreign Affairs of the People’s Republic of China (the PRC or China) Le Yucheng summoned then- U.S. Ambassador Terry Branstad and deemed the HKHRDA a nakedly hegemonic act.2 At the same time, China’s Ministry of Foreign Affairs issued a statement condemning the Act as “a severe interference in Hong Kong affairs, which are China’s internal affairs.”3 The statement 1. Hong Kong Human Rights and Democracy Act of 2019, Pub. L. No. 116-76, 133 Stat. 1161 (codified as amended in scattered sections of 22 U.S.C.) [hereinafter HKHRDA]. 2. Angry China Summons U.S. Ambassador to Protest Trump’s Signing of Hong Kong Bills, L.A. Times (Nov. 28, 2019), https://www.latimes.com/world-nation/story/2019-11-27/ trump-signs-bills-in-support-of-hong-kong-protesters [https://perma.cc/5L2P-34GN]. 3. Statement of Ministry of Foreign Affairs of the People’s Republic of China on Hong Kong Human Rights and Democracy Act (Nov. 28, 2019), https://www.fmprc.gov.cn/ mfa_eng/zxxx_662805/t1719774.shtml [https://perma.cc/HWD2-JSXB]. 96 25 UCLA J. INT’L L. & FOR. Aff. (2021) continued: “It is also in serious violation of international law and basic norms governing international relations. The Chinese government and the people firmly oppose such stark hegemonic acts.”4 Despite China’s protests, former U.S. Secretary of State Michael Pompeo, in accordance with the HKHRDA and in response to Beijing’s plan for a national security law for Hong Kong,5 certified to Congress that, under U.S. law, Hong Kong no longer warranted special treatment as had been the case since July 1997, since “[n]o reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”6 On May 29, 2020, Trump declared his intent to eliminate policy exemptions that provided Hong Kong with special treatment. This decision, in the words of Trump, “[would] affect the full range of agreements we have with Hong Kong, from our extradition treaty to our export controls on dual-use technologies and more, with few exceptions.”7 Led by the United States, the United Kingdom, and Japan, the G7 nations released a joint statement which expressed grave concern about the Hong Kong National Security Law (National Security Law). The statement condemned China’s decision as “not in conformity 4. Id. 5. On May 28, 2020, the National People’s Congress of the People’s Republic of China (PRC) passed the “Decision to Establish and Improve a Legal Framework and En- forcement Mechanism for Safeguarding National Security in the Hong Kong Special Ad- ministrative Region” which authorizes the National People’s Congress Standing Committee (NPCSC) to promulgate a National Security Law directly applying in Hong Kong. Then, on June 30, the NPCSC passed Hong Kong’s National Security Law and it was officially pro- mulgated on