Power through trade: opportunities and constraints of the European Union’s norm entrepreneurship—the case of Hong Kong

The economic, trade, and cultural relations between the European Union (EU) and Hong Kong are widely recognized in the existing literature to be the most beneficial and therefore the least resisted pathways available for the development of a partnership. Since the resumption of Chinese sovereignty over Hong Kong, such functional–instrumental way of thinking has dominated the policy milieu. This article focuses on an oft-neglected aspect of EU–Hong Kong relations—the transfer of EU-sponsored norms and the corresponding policy changes in Hong Kong. To illustrate the roles of the EU as a norm setter in Hong Kong, we ask why and how the EU has been the driving force behind a series of legislative amendments introduced by the Hong Kong government in recent years to curb cross-border tax evasion and avoidance. We argue that the internalization of EU-sponsored norms may occur when they are seen as legitimate, appropriate, and meeting the needs of Hong Kong. However, Hong Kong has focused on reducing the costs and burden compliance as practicable as possible. In the light of the EU’s Global Strategy, the prospects of EU norm entrepreneurship will be analyzed with the help of a set of three hypotheses.