A top official with the Hong Kong Economic and Trade Office (HKETO) has explained how Canadian firms can benefit from the Closer Economic Partnership Arrangement (CEPA) free trade initiative agreed recently by Hong Kong and China.
Addressing a business seminar entitled ‘CEPA - A New Expressway to China Through Hong Kong’, Mr Bassanio So, Director of HEKTO Canada, described how CEPA permitted Canadian companies partnering with Hong Kong earlier access to the Mainland China market, ahead of and beyond China's World Trade Organisation commitment.
"CEPA provides market liberation commitments towards Hong Kong companies which eliminates tariffs on 90% of Hong Kong goods exported to Mainland China, provides preferential treatment to Hong Kong service providers in a total of 18 major service sectors and simplifies cross-border trade between Hong Kong and Mainland China." Mr So observed, continuing:
“The benefits can be immediate. The key issue is that as long as your products are 'made in Hong Kong', satisfying the rules of origin, it does not matter whether your company has an operation in Hong Kong.
"Even without a manufacturing operation in Hong Kong, you may always partner with, or outsource to, a Hong Kong manufacturer to enable your product to enjoy tariff-free treatment under CEPA," he explained.
Officially effective on January 1 this year, CEPA covers three main areas, namely, trade in goods, trade in services and trade and investment facilitation.
Under the category of trade in goods, 374 product codes of Hong Kong's exports to Mainland China enjoy zero-tariff status. Since CEPA adopts a building block approach and provides a mechanism for further liberalisation measures, by January 2006, all exports from Hong Kong meeting the rules of origin will be exempt from tariffs.
As for trade in services, currently 18 service sectors are covered under CEPA. In some sectors, like real estate and construction services, logistics services, transport services, distribution services, legal services, and audiovisual services, the concessions extend beyond China's WTO commitments.
With regards to trade and investment facilitation, Hong Kong and Mainland China agreed on enhancing co-operation in seven areas, which include trade and investment promotion, transparency in laws and regulations and cooperation of small and medium enterprises.
The seminar was jointly organised by the HKETO, the Mississauga Board of Trade and Mississauga Board of Chinese Professionals and Businesses. Other speakers at the seminar were the Director of the Mississauga Economic Development Office, Mr Larry Petovello; the Marketing Manager of Hong Kong Trade Development Council in Canada, Mr Ken Fong; and the Assistant Vice President, HSBC Bank Canada, Greg Vilmott.
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