BritCham Calls For More Targeted HK-China Agreement

by Mary Swire, Tax-News.com, Hong Kong

20 March 2002

The British Chamber Of Commerce in Hong Kong has reportedly questioned the proposed Closer Economic Partnership Agreement (CEPA) which is currently under discussion, arguing that a broad agreement between the SAR and mainland China could, in fact, do more harm than good.

According to a report in the South China Morning Post on Tuesday, in its five page submission to the Government, BritCham warned that an umbrella agreement between the two regions could serve as an administrative distraction from fixing the 'serious practical impediments to business' between the SAR and the mainland.

'It could be argued that administrative time consumed by negotiating such an 'umbrella' agreement would actually crowd out the time needed to address...focused objectives, thus delaying progress in these materially pressing areas,' the BritCham submission argued, suggesting as an alternative a more targeted and limited intial agreement.

Like the American Chamber of Commerce, BritCham is concerned that suggestions for the definition of a 'Hong Kong company' already posited could limit participation in the free trade agreement, and reduce the subsequent benefits for long-established multinationals in the jurisdiction.

According to the SCMP, the document claimed that the free trade agreement proposals, as they now stand, contain: 'arbitrary distinctions that will lead to damaging and unreasonable discrimination against many BritCham members.'

The Chamber has also warned that if the Chinese authorities are given the power to ultimately ratify the status of a Hong Kong company, the SAR Government will have 'gifted to Beijing the power to adjudicate the domicile of a Hong Kong company.'

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