Hong Kong And China Discuss Expansion Of CEPA

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

14 February 2007

Mainland China and Hong Kong are striving to reach a consensus before July to give substance to a new supplemental agreement on the Closer Economic Partnership Arrangement between the two territories.

Hong Kong's Ministry of Commerce and the Industry & Technology Bureau convened the first CEPA Senior Officials Meeting in Hong Kong on Monday and Tuesday this week to discuss further liberalisation of the services trade and advancement of trade and investment facilitation under the pact.

The Mainland delegation was led by Ministry of Commerce Department of Taiwan, Hong Kong & Macau Affairs Deputy Director-General Sun Tong. The Hong Kong team was led by Director-General of Trade & Industry Joseph Lai.

According to the Hong Kong government, both sides had a "positive and constructive meeting" on the work of further liberalisation under CEPA, and agreed to further discuss the subject soon.

CEPA is the first free trade agreement signed by China and Hong Kong. Since the signing of the CEPA main text in June 2003, and its six annexes in September the same year, the two sides have signed the Supplement to CEPA, Supplement II, and Supplement III in October 2004, October 2005, and June last year.

CEPA covers liberalisation and co-operation measures in trade in goods, trade in services, and trade and investment facilitation. At present, all Hong Kong products satisfying the CEPA rules of origin are entitled to tariff-free treatment upon importation into the Mainland market. Hong Kong service suppliers in 27 service areas can also enjoy preferential treatment in accessing the Mainland market.

As at the end of January, more than HK$7.1 billion (US$909 million) worth of Hong Kong products had been entitled to zero-tariff treatment under CEPA, and more than 1,700 Hong Kong Service Supplier Certificates had been issued.

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