by Hong Kong People’s Alliance Against WTO (HKPA) (1)

Hong Kong has long enjoyed the status of
one of the world’s great trading centers. But
now many Hong Kong civil society organizations
are banding together under the slogan
“Kong Yee Sai Mau!” (Cantonese for “Protest
World Trade Organization!”) in preparation for
the WTO’s Sixth Ministerial Conference
(MC6), to be held in Hong Kong in December.

 Brief History of Trade and Economics in Hong Kong

With essentially no natural resources, and dependent on
imports for raw materials, food, and fuel, Hong Kong has
throughout its history existed largely as a trade center. In spite
of its small size it now ranks as the 11^th largest trading entity
in the world. (2)

By the end of the 1970s and into the 1980s, however, Hong
Kong prices became less competitive in the world
marketplace. (3) Increases in labor wages and land costs made its
formerly principal export industries, such as electronics, toys
and especially garments, too expensive to maintain in highly
developed Hong Kong. (4) Between 1979 and 1984, China instituted
major economic reforms (5) leading to the development of
special economic zones where Hong Kong enterprises moved
the more labor-intensive manufacturing part of its industry
processes while keeping the high value-added front and back
end in Hong Kong. (6)

In 1997-1998, just as Hong Kong returned to Chinese sovereignty
as a Special Administrative Region (SAR), its economy
experienced major challenges due to the Asian financial crisis.

To help stimulate their economies in the aftermath of the crisis,
mainland China and Hong Kong developed a Closer Economic
Partnership Arrangement (CEPA), which was
implemented on January 1, 2004. CEPA, a bilateral free trade
agreement (FTA) that is required to follow WTO rules on FTAs,
covers trade liberalization in goods, services, trade and investment.

Under CEPA, 18 service sectors in Hong Kong have been
opened to China, including banking, real estate and construction,
telecommunications, transport and professional services. (7)
Over the last couple of decades, Hong Kong has changed its
focus from a primarily manufacturing-based economy to a
more services-oriented economy, especially for companies
doing business in China. (8) The manufacturing sector decreased
from 13.5 percent of the Gross Domestic Product (GDP) in
1992 to just 4.5 percent in 2002. (9) The number of manufacturing
workers dramatically decreased from 22 percent of the
total labor force in 1992 to 6 percent in 2002. (10) At the same
time, the services sector increased from 79 percent of GDP in
1992 to 88 percent in 2002, (11) representing an increase from
69 percent of the labor force in 1992 to approximately 84 percent
in 2002. (12) All of these trends are continuing. (13)

Textiles and clothing remain Hong Kong’s main manufacturing
industries, although their significance has greatly
decreased. Other major manufacturing industries include
machinery and equipment, electronics, and printing and publishing.
(14) Major players in the services sector include traderelated
and tourism-related services, transportation, social and
personal services, infrastructure, information technology and
finance and business services.The amount of trade in services
has also grown at an average rate of 7 percent in real terms over
the last twenty years. (15)

 The human face of trade and economics

These figures might suggest quite a rosy picture for Hong
Kong, especially when coupled with praise from institutions
such as the U.S.-based Heritage Foundation and the Fraser
Institute of Canada describing Hong Kong as the world’s
“freest economy.”The reality, however, is different. (16)

Trade and industrialization in Hong Kong have developed
without interference or regulation from the government, in
contrast to some other East Asian governments, notably Singapore
and South Korea. (17) However, criticism of this laissez-faire
“policy” is growing not only among grassroots groups, but
even within the business community. Some in the domestic
business sphere suggest the government is doing little to
encourage competition in an economy that is dominated by a
few major companies, and is not providing enough support to
small and medium business enterprises (SMEs). (18) Hong Kong’s
SMEs represent more than 95 percent of the SAR’s companies (19)
and employ 60 percent of the workforce, (20) even though 90
percent of the SMEs employ fewer than 10 workers each. (21)

From the grassroots end, some civil groups criticize the
government’s inaction in protecting workers affected by the
trade and industrialization policies developed by business. For
example, some groups suggest that the Legislative Council
(Legco), the lawmaking body that has the power to approve or
amend proposals from the administration, is subject to too
many restrictions from the Beijing government.These restrictions,
which frustrate efforts to make Hong Kong’s Basic Law
more democratic, also give little hope for the passage of more
effective laws and legislation to protect the rights of common
people in areas such as minimum wage protection laws. (22)

Despite Hong Kong’s much-admired economic growth and
development, many economic and social problems have
accrued since the 1990s.The poverty gap has been increasing
steadily in recent years, with 2002 statistics revealing that the
poorest 20 percent of the population received just 4.4 percent
of the SAR’s income, while the wealthiest 20 percent earned
57.1 percent.This disparity has placed Hong Kong 17^th on the
World Bank’s list of 30 countries with substantial income
inequality, sandwiched between Zambia and El Salvador. (23)

Another economic problem lies in the rapid rise in unemployment
since the Asian financial crisis of 1997-1998.
Unemployment had previously not been much discussed in
Hong Kong due to its historic low levels, and Hong Kong
enjoyed the reputation of offering a job for everyone who
wanted to work. Attention turned to this area in the 1990s
when unemployed surged from an average of 1.1 percent in
1989 (24) to 6.2 percent by 1999. (25) The unemployment rate has
still not dropped to its previous levels, currently standing at
about 6.1 percent. (26) While the economy has been improving
in Hong Kong overall, economic growth has not produced
new jobs.

During this time, Hong Kong has been in the process of
moving into a more knowledge-based economy, and much of
the unemployment has been due to layoffs. In contrast to previous
times of high unemployment in Hong Kong,workers are
now jobless for longer periods of time. (27) Also, the number of
mainland Chinese immigrants allowed to settle in Hong Kong
has doubled from 75 to 150 persons a day since 1995, and the
movement of mainlanders into unskilled labor has exacerbated
a downward trend in wage earnings. (28)

Corporate and government neo-liberal management strategies
have led to considerable workplace restructuring and downsizing.
(29) As one consequence, the number of hours worked per
week has increased from an average of 47 hours in 1998 to 49
hours in 2003. In fact, 38 percent of Hong Kong’s employed
now work more than 50 hours per week. (30) At the same time,
workers are earning less and less, (31) while both the public and
private sectors are also providing fewer benefits such as
employer contributions to pension funds and insurance plans. (32)

Many workers who manage to find jobs are hired on shortterm
contracts or on a part-time basis. In the period from
November 1994 to September 2000, the number of part-time
workers nearly doubled from 67,800 to 122,000 in real numbers,
representing a shift from 2.7 percent to 4.3 percent of
the workforce. (33) Likewise, self-employment has become commonplace,
not necessarily out of choice.Truck drivers, for
example, are being told by their corporate employers to
describe themselves as self-employed, which means they are
not eligible for benefits. (34) The number of Hong Kong’s unemployed
and working poor had grown to 1.25 million by the
end of 2004,35 when the economy had fully recovered from
the effects of SARS.

These economic problems can have more wide-reaching
implications in other areas. For example, in a recent survey by
the Clothing Industry, Clerical and Retail Trade Employees General
Union, 90 percent of interviewees reported job-related
mental or physical health problems. (36)

The people of Hong Kong have not suffered these reverses
in silence.There have been widespread calls for welfare reform,
especially as more than half a million residents now depend on
Comprehensive Social Security Assistance (CSSA).When introduced
in 1971, CSSA was originally intended to provide only
minimal funds in order to “encourage” recipients to resume
working; (37) unfortunately, many recipients no longer have this
luxury.

Pressure is also building for the introduction of a minimum
wage, (38) a social safety net, public job creation programs and
other redistributive measures. (39) The government’s inadequate
response to these demands has led to increasing public disillusionment.
(40) Recent welfare budget cuts have done little to raise
hopes that the new Chief Executive Donald Tsang will implement
much real change after the current honeymoon period. (41)

 The Hong Kong Government and the WTO

Hong Kong, a “free” port and tariff-free zone, (42) had already
been following many of the WTO’s principles when it joined
the organization as a founding member in 1995. The local
government has always had a strong impetus to liberalize
global trade.

Soon after it joined the WTO, Hong Kong signed the Agreement
on Government Procurement (GPA) in 1996. (43) It is not
hard to make a connection between the government’s perennial
eagerness to please the unrestrained business sector (44) and
the signing the GPA, one of four voluntary multilateral agreements
for WTO members, which aims to open up government
procurement markets to a larger multilateral trading system.

The 37 GPA signatories agree that they will not favor or even
protect their own goods and services against foreign products
or suppliers. (45) Interestingly, this agreement was specifically
excluded from the original General Agreement on Tariffs and
Trade (GATT) members’ obligations, and has been recently
taken out of the larger main agreements, specifically the General
Agreement on Trade in Services (GATS), (46) apparently in
line with recent protectionist trends promoted by many developed
countries. (47)

Within the current round of WTO negotiations, Hong Kong
has been focusing on market access issues specifically relating
to non-agricultural market access (NAMA) and services. In
general, the government seeks to negotiate trade facilitation,
especially by those countries they feel have discriminatory
trade barriers. (48)

In terms of services, the government’s summarized commitments
list offers to enhance or propose complete absence of
limitations in most of the business, communication and transportation
sectors and construction and related engineering
services. The areas retaining restrictions include retail distribution
services for pharmaceutical, medical, surgical and orthopedic
products, and the government has made few offers in the
banking and financial services sector. Major changes have been
agreed upon with regard to environmental services (e.g.
sewage, refuse disposal sanitation and other areas such as nature
and landscape protection), the transport/distribution sectors
(e.g. rail, road, maritime transport) and some business areas
(e.g. printing and packaging), most of which had not previously
been included in the agreement. (49) In general, Hong Kong
is keen to open up markets where it feels it has an advantage.

According to the Trade and Industry Department, Hong
Kong does not have any existing commitments or offers relating
to certain specific professional services, or for its postal,
educational, social, sporting and air transport services. (50) However,
the Polaris Institute notes that Hong Kong is one of the
countries pushing hardest for negotiations in services where
negotiators are under increasing pressure to open domestic
services such as education, healthcare,water and energy
sources to foreign competition. (51) In particular, Hong Kong is
one of the countries pressuring Bangladesh to liberalize its
service sector, (52) and is also requesting that India, Indonesia
and Myanmar liberalize their services sectors. In answer to
questions regarding the benefits and impact of liberalization in
poor countries such as Myanmar, the government simply states
that trade and liberalization are good for development-end of
discussion.

In turn, other countries are asking Hong Kong to further
liberalize certain sectors. For example, the EU has specifically
asked the Hong Kong government to open up its water (53) and
supermarket sectors, (54) although the government has not discussed
this. Agriculture has not been a priority for negotiations,
although with Hong Kong chairing the upcoming
ministerial conference, the government will need to play a
more active role in an area that has been an integral and divisive
part of the Doha Development Agenda (DDA) round of
negotiations.

There is very little detailed official information available, at
least in English, regarding Hong Kong’s negotiations on other
agreements such as Trade-Related Aspects of Intellectual Property
Rights (TRIPS), which includes trademarks, copyright,
patents and designs, plant varieties and trade secrets.

 The Chinese Government, Hong Kong and the WTO

Thus far, Hong Kong seems to have maintained autonomy
from the Chinese government with regard to its WTO positions.
(55) However, given the tendency of Hong Kong’s administration
to avoid offending Beijing, it may be expected that
Hong Kong will avoid taking positions that might antagonize
the mainland. (56)

 Impact of the WTO on Hong Kong

Given the integral importance of trade to Hong Kong, the
direct impact of WTO agreements can be difficult to tease out,
especially since there has been no impact assessment made easily
available to the public, (57) if such an assessment has even
been performed. Economic and social problems resulting from
general trends in this highly capitalist society have been building
since before the WTO began, although they have been
sharply exacerbated in the ten years since the WTO came into
being.

Nevertheless, direct connections can be drawn between the
WTO and certain developments in Hong Kong.There are also
grave concerns about government transparency in negotiations.
Given Hong Kong’s close trading relationship with
mainland China, the SAR has also experienced the impact of
China’s accession to the WTO, especially in regards to the ending
of the Multifibre Arrangement (MFA) and the Agreement
on Textiles and Clothing (ATC). In addition, there are the larger
implications of Hong Kong’s leading position in the WTO, and
in the hosting of the Sixth Ministerial Conference (MC6) in
December.

General Agreement on Trade in Services (GATS)

Opening up the services sectors under the GATS agreement
will have a smaller impact on Hong Kong than on other Asian
countries such as the Philippines and Indonesia, but the effects
are still evident. While the GATS agreement does not automatically
require basic public sectors to be privatized, the “barriers”
that governments pose to trade in these areas are being
strongly challenged by the Hong Kong business sector among
others, (58) and much literature points to a correlation between
opening of services sectors and subsequent privatization.

Followers of the GATS agreement, including the Hong Kong
government, (59) have said that provision of universal services
has not been directly subjected to market forces, as GATS
applies to all service sectors except “services supplied in the
exercise of governmental authority,” referring to those services
that are “supplied neither on a commercial basis, nor in competition
with one or more service suppliers” (Article 1.3). (60)

However, the terms governmental authority and commercial basis have
not been defined in the GATS text, so it seems that these policies
have resulted in countries actually “successfully safeguarding
the legal and political spaces to be exploited by those
interested in commercializing supply of universal services.” (61)

It is no wonder, then, that so much concern expressed has
been expressed regarding privatization plans for the “big market,
small government” Hong Kong administration, (62) specifically
in the areas of water supply, (63) the airport (which is
already being run like a business)64 and other sectors under
the GATS negotiations, including environmental services and
refuse collection, which is already in its second stage of privatization.

Many concerns have also been raised about the lack of
public consultation on recent major government privatization
plans. (65)

In terms of the environmental sector, no one disputes that
air,water, land and noise pollution in Hong Kong is quite bad.
The government has created many regulations aimed at preventing
further environmental deterioration, (66) but increasing
complaints of noise and land pollution indicate that the laws
have not been very effective. (67) There are worries that further
privatization of environmental services will compromise sustainable
development in the interests of commerce. Ecological
factors are often excluded from Hong Kong’s promotion of
economic development and indicators based on Gross Domestic
Product (GDP), leading to the misapprehension that Hong
Kong is richer and healthier than in reality. (68)

The GATS agreement is also causing concern for the
migrant worker sector. Migrant worker group forums have
devoted considerable discussion to the lack of any mechanism
to enforce human rights standards. Whether this should fall
within the realm of the WTO, a purely trade-oriented organization,
is another discussion. However, adherence to WTO rules
has been found to have significant human rights impacts on
migrant workers in both source and destination countries.
The number of migrant workers in Hong Kong has greatly
increased over the past 20 to 30 years as job opportunities follow
the flow of capital. Many of Hong Kong’s migrant workers
are employed as foreign domestic helpers (FDHs), coming
mainly from the Philippines (121,534), Indonesia (87,842)
and Thailand (5,068). (69)

Migrant workers are particular concerned with the implications
of GATS Mode 4, which covers the temporary movement
of natural persons, temporary left undefined, and only includes
those who are providing services in their own country rather
than overseas.This rule means that small groups of white collar
workers can move freely, but ordinary grassroots laborers are
tightly restricted in terms of contracts and right of abode. In
Hong Kong, a university professor from overseas is eligible for
right of abode after living in Hong Kong for seven years, but a
FDH is never eligible for right of abode, no matter how long
she lives in Hong Kong. This restriction seems especially unfair
given the high contribution of FDHs to the local economy,
conservatively estimated at HK$13.8 billion, (70) not to mention
their significant social contributions.

There are many other negative conditions for domestic
helpers and other migrant workers in Hong Kong, including
the lack of labor ordinance protection and issues of occupation
disease, but these are beyond the scope of this paper.

Agreement on Government Procurement (GPA)

Government procurement is another major area of concern for
many Hong Kong citizens, especially in the construction sector,
which is heavily dependent on public works projects. In
fact, half of all construction work value is performed at public
sector sites.Traditionally, construction materials were bought
in China and manufactured in Hong Kong, but now many
items are bought prefabricated from China.The result is that
more and more construction workers are losing their jobs. (71)

In addition, there is a general perception that the quality of
public services in Hong Kong is worsening, especially in
healthcare, education and geriatric care. Some even go so far as
to say there is a healthcare crisis. Extensive de-formalization of
Hong Kong’s public hygiene sector means that more and more
are contract workers rather than pensionable public servants. (72)

Given the lack of stable and reliable employment, how can
these workers be expected to provide the same quality of service
and care as full-time workers who have accumulated years
of experience? 73)

Similarly, the cleaning service sector has already been
opened to outside competition. Outsourcing has become a
major area of concern, as many cleaning service workers are
being exploited by employers who bend GPA rules as they see
fit. Earlier this year, for example, a case came before Legco in
which cleaning service workers working for the Housing
Department (HD) were found to have been paid much less
than the average rate, in contravention of procurement contracts.
(74)

Hong Kong workers are becoming increasingly insistent
that local government contracts should be fulfilled by local
companies and workers. (75) The government did not consult the
Hong Kong people when signing the government procurement
agreement, and in fact, few people are even aware of it.

When workers call for more government intervention, the
government says this is not allowed under the GPA. (76) The government’s
inability to use its purchasing power to encourage
local employment and markets raises the question of what
relationship the government has with business, and whether
collusion is involved. This is an important area that needs to be
monitored.

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

TRIPS is another major agreement that has impacted Hong
Kong. In fact, Hong Kong incorporation of these WTO standards
into its domestic laws goes even further than international
standards. Infringement of intellectual property rights,
especially the pirating of software and CDs, is a topic of frequent
discussion in Hong Kong, (77) but less often mentioned is
the government’s proposal to make employee use of pirated
software a criminal offense, as opposed to the current civil
offense. (78)

Concerns regarding copyright issues include the impact of
this liability on education and the dissemination of information.
The end-user possession criminal liability condition in
Hong Kong’s Copyright Ordinance has been temporarily suspended,
but only until July 2006. There is also some discussion
of how the government defines a reasonable use of copyrighted
works in specific circumstances. Many have expressed
concern over how these punitive measures might affect the
work of non-profit organizations, and more recently there
have been proposals to exclude non-profit making educational
organizations from some categories. But there is still some
question of what constitutes a “non-profit-making educational
institution.” Many non-profit organizations would like to see
the more flexible U.S. model of “fair use” applied to Hong
Kong, but the business sector prefers the more rigid Hong
Kong approach. (79)

Government Transparency

While enactment of WTO agreements clearly impacts Hong
Kong, the ways in which they are negotiated have also raises
concern. In general, transparency and consultation with the
Hong Kong public has been very poor. Many groups, including
the Hong Kong Chamber of Commerce (80) in addition to grassroots
groups, have criticized the lack of information available
on the negotiation process.

The government has rebutted these frustrations by saying it
has held two “consultations” among the public. (81) However,
these consultations have raised a number of concerns. First of
all, they were carried out over a very short duration (one
month), which made it difficult for some groups to analyze
the documents and develop a response, especially organizations
who meet only once a month. Also, the consultation
periods were far apart, with the previous one held more than
three years ago. Considering how much has been happening
with the WTO over the last couple of months, three years is a
long time to wait to find out what the government has been up
to in its negotiations. Also, this year’s consultation was originally
aimed only at the business sector, and it took quite some
time before Legco and civil society organizations were aware
of and had access to the information.This was a far from democratic
method of assessing public views.

Impact on Hong Kong from China’s accession to the WTO

With Hong Kong’s economy so closely related to that of the
mainland, a discussion of the WTO’s impact on Hong Kong
cannot be complete without referencing China’s 2001 accession
to the WTO.While much has been written on this subject
by entities such as Hong Kong’s Trade and Industry Department,
(82) most articles focus on the positive market implications
while overlooking possible negative impact at the human level.
Hong Kong’s status as the sole gateway to China will likely
decrease as major mainland ports become more open to direct
trade, thereby increasing both local and foreign competition. (83)

On the human side, with Hong Kong managing many of its
industries in China, specifically the production and services
sides, there is concern over Hong Kong’s responsibility to
improve the social and working conditions in its growing
mainland-based industries, which have not enjoyed significant
improvement in health and safety.

These issues are not new. For example, a fire broke out in
November 1993 at the Hong Kong-owned Zhili Toy Factory in
the Shenzhen Special Economic Zone, killing more than 87
workers and severely injuring 47. Most of the workers were
unable to escape because windows were sealed and doors were
blocked. More than 10 years later, the victims still have not
received compensation. Such stories reflecting extreme health
and safety concerns in Chinese factories are not uncommon,
even today.There is a great need for continued advocacy for
and empowerment of Chinese workers using the multi-stakeholder
approach, and Hong Kong’s corporate sector needs to
follow through on its responsibilities, as clearly stated in local
law and international labor standards.

The effects of WTO flow in both directions. We have also
seen direct effects in Hong Kong from the MFA phase-out,
which officially ending the garment and textile quota system
as of January 1, 2005. Some countries, including the U.S. and
the member states of the EU, have reacted to the subsequent
flood of Chinese textiles by limiting imports, with the result
that Hong Kong businesses have recently begun considering
relocating their garment factories back to Hong Kong. Unions,
however, are not enthused at the prospect,worrying that working
conditions will worsen as employers try to curb labor
costs. (84)

In China, where 60 percent of rural income is based on
agriculture, (85) rural household income is decreasing. The Chinese
government made huge concessions in order to join the
WTO, volunteering to reduce its average agricultural tariff to
15 percent as compared with 24 percent in other developing
countries. Under these conditions, ten million farmers have
left farming, and 150 million people have abandoned rural
areas in search of a better life in the cities. (86) Much of this surplus
labor from rural areas has been absorbed into China’s Special
Economic Zones, where drastic economic restructuring
has intensified a “race to the bottom” in the international labor
market. As a result, many Chinese products are flooding worldwide
markets as China pursues its agenda to capture the world
market.

Larger Perspective

There are larger implications of Hong Kong’s participation in
the WTO.The WTO mainly advocates a “one size fits all” model
for trade and economics, which does not take into consideration
the uniqueness of each country’s development. In fact,
many places have looked to Hong Kong as the “model” for
ultimate trade liberalization and rules. (87) However, mindlessly
following the system advocated by business leaders may result
in neglect of the larger ethical implications. For that reason, it
is important to critically examine these mainstream trends.
In this globalized economy,we need to be mindful that our
actions in Hong Kong will have repercussions on even the
smallest economies. Economic decisions made with only the
business sector in mind, especially in Hong Kong, where the
general public is largely kept out of the loop, can have major
holistic implications. For this reason,we need to speak up and
challenge these imbalances at the local governmental level, in
hopes of achieving a positive ripple effect to other countries.

MC6 in Hong Kong

Apart from the world looking to Hong Kong’s trade policies,
we can also examine the impact of holding the WTO’s ministerial
conference in Hong Kong. Hosting the conference will
impose a considerable financial burden on Hong Kong residents,
costing taxpayers about $250 to $300 million (88) while
projected to recover only $100 million in related tourism dollars,
(89) but it will give Hong Kong a unique opportunity to
affect positive change at this exciting juncture. WTO negotiations
are at a critical point, and even the outgoing directorgeneral
is saying that MC6 could be the make-or-break point. (90)

Having the negotiations in Hong Kong has raised awareness
of the WTO among members of the local community, many of
whom are not very knowledgeable about the WTO in general,
much less its impact. There had been little WTO-related activity
locally prior to the announcement of Hong Kong’s hosting of
the conference, but now many local groups have become active
in local WTO awareness and impact campaigns, as well as in
joining more international, longer-term efforts.

Of course, local activists have had to deal with a constant
media focus on the potential “violence” that may occur when
people make a stand against the abusive or unjust use of power
resulting from the implementation of WTO policies. Such sensationalist
media tactics, while commonplace in local media, (91)
are having severe local and international repercussions.

The rights of concerned local citizens to freely express their
views are being strongly impeded. For example, Hong Kong
police recently showed Legco brief (and consequently slanted)
videos of only the most widely recorded reactions of strong
unrest and dissatisfaction at the Seattle Ministerial Conference
in 1999 and at the recent G8 summit in Scotland to “make
lawmakers aware of the possible dangers facing Hong Kong
when the WTO meets here December.” (92) These actions on the
part of police, however well-intentioned, have resulted in
Legco deciding to prevent all unregistered citizens, including
concerned protesters, from coming within viewing distance of
the Hong Kong Convention and Exhibition Centre venue for
the entire duration of the ministerial conference. Any unauthorized
person who enters the area will be subject to the maximum
penalty of a two-year jail term. This is the first time that
such rules have ever been implemented.

It is quite evident that much of the impact of the WTO concerns
basic civil rights. It is the right of citizens of all nationalities
to have the right to a fair and sustainable living income. It
is the right of citizens to know what their government is
doing. It is the right of citizens to have a voice. In all these
respects, the rights of citizens in Hong Kong are being seriously
abused.

 Public sentiment on trade issues

Unfortunately, it seems that the average Hong Kong citizen
concerns himself little with impediments to his rights. There is
a general perception that what’s good for the economy is good
for the people of Hong Kong. Hong Kong’s historically open
economy has led to a strong popular belief in the effectiveness
of free market policies.

However, we are seeing increasing signs that these free market
policies are not necessarily the answer, especially as poverty
grows in Hong Kong. Most people are aware of the high levels
of local poverty, but this poverty is still generally attributed to
an individual’s inability to acquire more marketable skills, or to
individual companies’ exploitative practices.

There is little awareness among the general public of the
WTO and its impact,much less the details of the specific
agreements such as GATS, NAMA,TRIPS or the Agreement on
Agriculture (AoA), and little understanding of factors such as
international trade rules. How can we make Hong Kong people
more aware of the impacts of the WTO?

 Local efforts

A number of local groups concerned with the impact of the
WTO have been formed in recent years, although their presence
is probably less widely felt than elsewhere, given Hong
Kong’s trade-friendly environment.

Local efforts include:
– research-based conferences on the impacts of the WTO and
its trade policies, connecting local issues with the larger
national and international trade and related issues;
– international conferences on issues of migration, development
and the WTO, as well as food sovereignty;
– Trainings for Trainers workshop for women’s organizations
and networks on gender and life-promoting trade;
– information sessions on university campuses by student
groups;
– dialogue and activism within the local ecumenical community
on ways by which faith-based groups can respond to
the issues of trade and globalization and create alternative
economic models;
– using movies to create discussion around the issues of neoliberalism,
capitalism, resistance and alternatives;
– musical performances by local groups to raise awareness of
these issues;
– targeting multinational organizations with connections in
China, and campaigns on behalf of Chinese workers;
– community workshops on the various agreements;

We need to make known the consequences of the WTO’s
actions, and show that Hong Kong citizens’ interests and rights
are at stake. We need to uncomplicate the WTO for the average
person.While doing this, we need to ensure that we do not fall
vulnerable to government attempts to divide us. We need to
mobilize and capitalize on the power of the people. The people
of Hong Kong can be a powerful force, as the actions surrounding
the proposed “Article 23” subversion laws have
shown. (93)

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BOX

 Hong Kong People’s Alliance on WTO (HKPA)

The Hong Kong People’s Alliance on WTO (HKPA) is a
network of 31 grassroots organizations, including trade
unions, community, religious, human rights and labor
groups and organizations that represent migrant workers,
students and women, as well as research organizations
and regional organizations based in Hong Kong.

HKPA has been active in engaging the Hong Kong
government to be more transparent in its WTO negotiations
by providing the Hong Kong community with easily
accessible periodic updates, briefings and
consultations on the content and agenda of meetings.

The Alliance has also been holding regular workshops
and community events to raise the consciousness of
local NGOs and citizens on the essence of free trade as
advocated by the WTO. In addition, the Alliance aims to
raise awareness of the situation of Chinese working
people following China’s accession to the WTO.

Last February, the Alliance organized an international
consultation meeting in Hong Kong, where more than
200 participants from 23 countries joined together to
discuss WTO impacts, updates and responses from the
civil society. HKPA is the lead facilitator of the mobilization
of local and international NGOs and other concerned
friends’ efforts in launching parallel activities,
collectively entitled “People’s Action Week,” to hold
workshops, teach-ins, cultural activities and freely
express our views while MC6 takes place in Hong Kong
in December.

(For more information on HKPA, see www.hkpa-wto.org)

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NOTES

1. The primary drafter of this brief was Sharon Schroeder, of Documentation
for Action Groups in Asia (a member organization of HKPA), with
final review by Mabel Au.

2. World Trade Organization,April 2005, http://stat.wto.org/Country
Profiles/HK_e.htm.

3. Victor K. Fung, Chairman of Li & Fung Limited, China and the Supply Chain,
Keynote address at Longitudes 04 in New York, NY,April 29, 2004.

4. The NRF Foundation,The Importance of the Apparel Industry to Economic Development,
(N.D.) http://www.sweatshops-retail.org/NRF percent20
Website/apparel.htm.

5. http://www.country-studies.com/china/the-first-wave-of-reform,-
1979-84.html.

6. Victor K. Fung, op cit.

7. Laurence Wing Him Ho, Economic Development of China and its Impact on Hong
Kong, Hong Kong Policy Research Institute, 2004.

8. “Hong Kong Economic Structure,” Economist Intelligence Unit, December 29,
2003.

9. “Government of the Hong Kong Special Administration Region,”November
2004, Hong Kong Background Information:Economy-HKBI/4-a/November
2004.

10. “Hong Kong SAR Government,” Hong Kong 2002 Structure and Development of the
Economy,http://www.info.gov.hk/yearbook/2002/ehtml/e03-01.htm.

11. “Government of the Hong Kong Special Administrative Region,” Hong
Kong Background Information:Economy-HKBI/4-a/November 2004, November
2004.

12. Hong Kong 2002 Structure and Development of the Economy, op cit.

13. Ibid.

14. Ibid.

15. Hong Kong 2002 Structure and Development of the Economy, op cit. See Also Hong
Kong Trade and Industry Department, June 9, 2005, Services Negotiations.

16. See John Berthelsen, “The ‘freest economies in the world’,” July 12,
2003, Asia Times Online, for an interesting discussion of monopolies in the
uncompetitive domestic economy of Hong Kong. http://www.atimes.
com/atimes/Asian_Economy/EG12Dk01.html.

17. Catherine R. Schenk, “Finance of Industry in Hong Kong 1950-70:A Case
of Market Failure?” Business History 46, no. 4 (October 2004): 583-608.

18. Hong Kong Monetary Authority, “Survey of the Financing Situation of
Small and Medium-Sized Enterprises,” Quarterly Bulletin (August 2000).

19. MindBranch, SME Banking in Hong Kong 2004, June 2004.

20. Albert P.K. Lau, The Small and Medium Enterprises in Hong Kong:To Be or Not To Be?
Hong Kong Small and Medium Enterprises General Association, http://
www.hksmega.org/SME percent20Forum/SMEs percent20in percent
20HK-To percent20be percent20or percent20not percent20to percent
20be.htm.

21. Bee-Leng Chua. Entrepreneurship in Hong Kong: Revitalizing Entrepreneurship. Paper
presented at Entrepreneurship in Asia in Hong Kong, July 2002.

22. Hong Kong Confederation of Free Trade Unions, “’Rule by Tycoon’
Consolidated,” Union Action, June 2002.

23. World Bank, World Development Index 2002, http://www.infoplease.
com/ipa/A0908770.html.

24. Simon Chi Fai LI. A Statistical Portrait of Hong Kong Unemployment in the Global
Context 1976-1995. Department of Public and Social Administration, City
University of Hong Kong (May 1997).

25. Hong Kong Census and Statistics Department,The Unemployment Situation is
Improving, http://www.info.gov.hk/censtatd/eng/statliteracy/etimes/
et041111.htm.

26. Ada Chong. Hong Kong’s Unemployment Rate Hits 39-Month Low of 6.1 percent.
Hong Kong Economic & Trade Office, March 21, 2005.

27. Simon Chi Fai Li, A Statistical Portrait of Hong Kong Unemployment in the Global
Context 1976-1995. Department of Public and Social Administration, City
University of Hong Kong (1997)

28. Nelson W.S. Chow, Unemployment, Depressing Wages, and Demand for
Welfare:The Case of Hong Kong. Social Policy Times 4, No. 1 (December
2004).

29. Kelvin Fan, Recent Developments in Labour Earnings in Hong Kong.
Hong Kong Monetary Authority Quarterly Bulletin (December 2003).

30. Ibid.

31. Ibid; also, “HK workers’ salaries shrinking,” The Electric New Paper, February
16, 2005.

32. Kelvin Fan, op cit.

33. Tam Wai Pang and Apo Leong, “Flexible Labour: Union Responses in
Hong Kong,” Asian Labour Update,45, October-December 2002, pp. 19-20.

34. Lee Chuk Yan, General Secretary of Hong Kong Confederation of Free
Trade Unions. Presentation at the Regional Conference on WTO, “Development
& Migration: Building Migrant and People’s Solidarity in Challenging
Neoliberal Development & WTO,” held July 17-19,2005, at BP
International Hotel, Hong Kong.

35. Legislative Council Secretariat. Research and Library Services Division,
“The Situation of Poverty In Hong Kong,” http://www.legco.gov.hk/
yr04-05/english/sec/library/0405in22e.pdf.

36. “90 percent of HK employees have job related health problems,” Corporate
Social Responsibility in Asia. July 14, 2005, http://www.
takungpao.com/news/2005-7-14/GW-427227.htm.

37. Nelson W.S. Chow, op cit.

38. Matthew Lee, “Unions urge Tung to set a $25 minimum hourly wage,”
The Standard, November 11, 2004.

39. HKCTU comments on the implementation of ICESCR in Hong Kong
(2005),April 4, 2005, http://www.hkctu.org.hk/english/contentr.
php?orgtopicid=282;Also Social and Economic Policy Institute Projects,
http://www.sepi.org/projects/projects_e.html#ssn.

40. Henry C K. Liu,“Why Hong Kong is in crisis,” Asia Times Online, July 4,
2003. http://www.atimes.com/atimes/China/EG04Ad04.html.

41. Hong Kong Council of Social Service, “Report On Achievements Of Corporate
Priorities 2004-05,” Business Plan 2005/06, http://www.hkcss.
org.hk/adm/BP/0506/0506_report0405_e.htm; See Also: Li Ping Wai,
“Budget cut in social welfare sector shows that the Government loses
integrity,” Apple Daily, June 16, 2005, http://www.hkddn.org/view/
demofight2.php?hkddn_ID=2029.

42. Basodan,Ahmed, “Hong Kong, China in Transition,” Based on a paper,
“Hong Kong: Structural Change, Integration, and Economic Policies”,
Conference on Financial Integration in Asia and the Role of Hong Kong,
Hong Kong March 7, 1997.

43. “WTO Government Procurement Committee Approves Membership of
Hong Kong,” WTO News: 1996 Press Releases, December 5, 1996.

44. Stephen Ip, Hong Kong’s Secretary for Economic Development &
Labour, said in a Tradelink Talk interview, “Right from the beginning,
the government has acted only as a facilitator to the business sector,
which is led by the market. And it remains so today.” In Stephen Ip: united we
stand, January 2005, Tradelink,http://www.tradelink-ebiz.com/english/
331n08or3m9a51l/newscast/cp_0412a.html.

45. Plurilaterals: of minority interest, http://www.wto.org/english/thewto_e/
whatis_e/tif_e/agrm10_e.htm#govt.

46. Overview of the Agreement on Government Procurement, http://www.wto.org/
english/tratop_e/gproc_e/over_e.htm.

47. Eveline Herfkens, “Trade: Our Path to The Millennium Development
Goals,” International Development Review, January 2004,
http://www.govnet.co.uk/heading.php?magazine=5&ID=495.

48. Hong Kong Trade and Industry Department. Hong Kong determines to hold a
successful Ministerial Conference, May 25, 2005, http://www.tid.gov.hk/
english/aboutus/presspeech/2005/20050525.html.

49. Hong Kong Trade and Industry Department. (June 2005) Hong Kong,
China’s (HKC) Services Commitments and Offers under the World Trade Organisation
(WTO) General Agreement on Trade in Services (GATS), . June 2005, http://www.
tid.gov.hk/english/trade_relations/tradefora/files/hkc_services_
commitment.pdf.

50. Ibid.

51. Polaris Institute, Tell Rogue WTO Negotiators to Keep Hands Off Services, http://
www.polarisinstitute.org/polaris_project/public_service/letter_WTO.
cfm.

52. “BD under WTO pressure to liberalise service sector Staff Correspondent,”
The Bangladesh Today, December 9, 2004.

53. 3D and FORUM-ASIA, GATS and Access to Essential Services, The Practical
Guide to the WTO. December 10, 2004, http://www.3dthree.org/
pdf_3D/Guide-075Ch5.

54. Jane Kelsey,Professor of Law at University of Auckland, discussed this in
her presentation on The Myth of Globalization:The New Zealand Experience, held
on July 7, 2005, at Hong Kong Polytechnic University.

55. U.S. Department of State, U.S.-Hong Kong Policy Act Report, .April 1, 2005.
56. Steve Tsang, Tung’s Choice, January 20, 2004, http://www.daga.org.hk/
z/blog/daga/news/2004_01_01_newsblog-a.htm.

57.The only mild exception is the pamphlet briefly describing the impact of China’s accession to the WTO on certain economic sectors in Hong Kong
Trade and Industry Department, “China’s Accession to the World Trade
Organization and Hong Kong, December 14, 2004, http://tid.gov.hk.

58. The Hong Kong General Chamber of Commerce, Proposals for the
2005-2006 Budget,April 1, 2004 to March 31, 2005, http://www.
chamber.org.hk/memberarea/chamber_view/redirect_statements.
asp?id=1966.

59. Hong Kong Trade and Industry Department,Allegation on the Government’s
“blackbox”operation in the WTO services negotiations totally unfounded, July 24, 2005,
http://www.tid.gov.hk/english/aboutus/presspeech/2005/20050724.
html.

60. World Trade Organization, General Agreement on Trade in Services (Article I-XXVI)
http://www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm. For a
good article discussing the issue of GATS and privatization, see Markus
Krajewski, “Public Services and the Scope of the General Agreement on
Trade in Services,” Center for International Environmental Law Research Paper,
May 2001, http://www.gatswatch.org/docs/markus.htm.

61. Raghav Narsalay, “Who Controls Rights Over Water in an Unfolding
GATS Regime? A Case Study of India, June 2003, paper presented for the
Research Project on ‘Linking the WTO to the Poverty Reduction Agenda,’
p. 6., http://www.gapresearch.org/governance/NarsalayGATSand
waterpaperjune03.pdf.

62. Even Legco has directly talked about the government’s plans to privatize
the public sector. See: Legislative CouncilOfficial Record Of Proceedings, July
10, 2004, http://www.Legco.gov.hk/yr03-04/english/counmtg/
hansard/cm0710ti-translate-e.pdf.

63. While there seem to have been only feasibility studies suggested on the
privatization of water, the government is concretely looking into the idea
of Public-Private Partnership (PPP), and has said it does not have current
plans for total privatization of water services. See Deputy Secretary for
the Environment,Transport, and Works Department Clement Cheung’s
June 4, 2005 letter to the editor of South China Morning Post [http://www.
etwb.gov.hk/FileManager/EN/whats_new/works_matters/response.
pdf].

64. Some concerns have been raised with Legco: Legislative Council Secretariat.
(2004, 30 June.) Report of the Panel on Economic Services for submission to
the Legislative Council, http://www.legco.gov.hk/yr03-04/english/panels/
es/reports/es0707cb1-rpt-e.pdf.

65. Legco News. (July 2005) Hong Kong Engineer (HKE), http://www.hk
engineer.org.hk/program/home/articlelist.php?cat=Legco&volid=61.
66. Hong Kong Environmental Protection Department. (July 22, 2003)
Summary of Environmental Legislation [http://www.epd.gov.hk/epd/english/
laws_regulations/envir_legislation/laws_overview.html].

67. Hong Kong Environmental Protection Department. Summary of Environmental
Legislation, July 22, 2003, http://www.epd.gov.hk/epd/english/
laws_regulations/envir_legislation/laws_overview.html.

68. World Wildlife Fund for Nature Hong Kong, November 23, 2000, Sustainable
Development. Factsheet No.22.

69. Asia-Pacific Mission for Migrants. Hong Kong Profile, February 2005, http://
www.apmigrants.org/country_updates/Hongkong.htm.

70. Asian Migrant Centre. (September 2004) Economic Contributions of Foreign
Domestic Workers in Hong Kong [http://www.asian-migrants.org/index.
php?option=content&task=view&id=9].

71. “Building Workers’ Rights: Construction Workers Fight for Unpaid
Wages and Jobs,” Union Action September 2002, http://www.hkctu.org.
hk/english/unionaction/sept2002nophotos.pdf.

72. Ibid.

73. See Carrie Chan, “Hospital helpers fear loss of jobs,” South China Morning
Post, January 26, 2004.

74. Legislative Council. Panel on Manpower: Minutes of meeting held on Thursday,22
April 2004 at 10:45 am in the Chamber of the Legislative Council Building [http://
www.legco.gov.hk/yr03-04/english/panels/mp/minutes/mp040422.
pdf].

75. Building Workers’ Rights, op. cit.

76. Ibid.

77. “CEPA ‘morale booster’ for Hong Kong economy,” China Daily HK Edition,
November 18, 2003.

78. Hong Kong SAR Commerce, Industry and Technology Bureau, Review of
Certain Provisions of Copyright Ordinance, December 2004.

79. Hong Kong SAR Commerce, Industry and Technology Bureau, Legislative
Council Panel on Commerce and Industry: Proposals on Various Copyright-Related Issues,
June 2005.

80. Hong Kong General Chamber of Commerce, Position paper on the Doha Development
Agenda Ahead of the Sixth Ministerial Conference of the WTO, July 13, 2005.

81. Information Services Department of the Government of the Hong Kong
Special Administrative Region,“WTO talks transparent: Raymond
Young,” July 24, 2005, News.gov.hk.

82. http://www.tid.gov.hk/english/trade_relations/topicalissues/
chinawto_pamphlet.html.

83. Erik Bøgh Christensen, “Bright outlook for Hong Kong as PRD manufacturing
base continues growth, Shippers Today,27, No 1 (Jan/Feb 2004).

84. Lee Chuk Yan, op cit.

85. Zi, Li. (2005) Rural Dilemmas. Beijing Review,10.

86. Au Loong Yu. The State of play of Hong Kong in the MC6. Presentation at APRN
Research Conference on Trade, held July 11-13, 2005 in Hong Kong.

87. Hong Kong Trade and Development Council, Hong Kong-a “model” for
financial centres in Asia, says Business Council in US,June 29, 2001, http://www.
tdctrade.com/tdcnews/0106/01062902.htm.

88. Legislative Council Panel on Commerce and Industry, Background brief on
Hong Kong’s hosting of the Sixth Ministerial Conference of the World Trade Organization,
February 15, 2005, http://www.Legco.gov.hk/yr04-05/english/
panels/ci/papers/ci0215cb1-862e.pdf.

89. “Hong Kong to reap benefits from WTO conference,” Xinhua News Agency,
February 26, 2005.

90. “WTO’s meeting in HK ‘crucial’,” South China Morning Post, June 2, 2005.
91. Yan Yan Yip and Jennifer Lee. Political Groups/Organizations. (August 24,
2004) Study on the Third Sector Landscape in Hong Kong,August 24, 2004, http://
www.info.gov.hk/cpu/english/papers/3rd_ch06.pdf.

92. Caroline Li, “Riot video drives home dangers of WTO meet,” The Standard,
July 20, 2005.

93. Hong Kong Basic Law Article 23 was to become an anti-subversion
security law. In July 2003, a series of public actions were held to protest
Article 23, including a July 1 rally where an estimated 500,000 people
peacefully marched to the Central Government Office.Their collective
actions and pressure resulted in the legislation being withdrawn.