The legal text of CEPA III was signed on October 18 by Hong Kong's Financial Secretary, Mr Henry Tang and China's the Vice-Minister of Commerce, Mr Liao Xiaoqi, after a High Level Meeting of the Joint Steering Committee under CEPA.

Welcoming the agreement, Mr Tang observed that the new measures will substantially build upon trade liberalisation already put into effect under the first and second phases of the CEPA.

"These additional measures will offer new business opportunities on the Mainland for Hong Kong enterprises and professionals and enhance Hong Kong's attractiveness to overseas investors. They will also help sustain Hong Kong's broad-based economic recovery and facilitate creation of new jobs in the private sector," he explained.

Under CEPA III, the Mainland agrees to give all products of Hong Kong origin tariff free treatment starting from January 1, 2006, upon application by local manufacturers and upon the CEPA rules of origin (ROOs) being agreed and met.

On trade in services, under CEPA III, there are 23 liberalisation measures spreading across 10 areas, namely legal, accounting, audiovisual, construction, distribution, banking, securities, tourism, transport and individually owned stores.

The Mainland has also agreed to allow Hong Kong legal representative offices to enter into association with Mainland law firms in different cities of the same province; and to allow Hong Kong people practising law on the Mainland to be employed at the same time by a law firm outside the Mainland.

All the liberalisation measures will take effect on January 1, 2006, and the Mainland will work out and promulgate the necessary implementation rules and regulations as appropriate.