ENG-2003 — Page 155

COMMERCE AND INDUSTRY

Mainland and Hong Kong Closer Economic Partnership Arrangement

The HKSAR Government and the Central People's Government (CPG) signed the main text of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) on June 29, 2003, and concluded the six Annexes on September 29, 2003. Under CEPA, the Mainland has agreed to eliminate import tariff for 374 Hong Kong products under its 2004 tariff codes and to give preferential market access to Hong Kong service suppliers in 18 services sectors2. Both sides have also agreed to enhance cooperation in trade and investment facilitation. CEPA came into full operation on January 1, 2004. It adopts a building block approach and provides a mechanism for further liberalisation measures. A Joint Steering Committee, jointly led by Financial Secretary of the HKSAR Government and the Vice Minister of Commerce of the CPG, is responsible for overall coordination of CEPA.

The establishment of the CEPA under the framework of the WTO will further promote trade and investment flows, as well as exchanges of talent, capital and technology, between Hong Kong and the Mainland, which would be mutually beneficial and conducive to sustained economic growth. Since the announcement of CEPA, the Government has launched a strong awareness and publicity campaign to promote the business opportunities brought about by CEPA to local, foreign and Mainland investors.

Hong Kong and New Zealand Closer Economic Partnership Agreement

Negotiations with New Zealand on a free trade agreement continued. The negotiations encompassed a wide-ranging scope with emphasis on trade and investment liberalisation and facilitation. The two sides have achieved good progress on many issues and are committed to concluding the negotiations as soon as possible to achieve a high-quality agreement that is beneficial to both economies.

Hong Kong's Participation in the WTO

The HKSAR is a founding member of the WTO. Its separate membership reflects Hong Kong's autonomy in the conduct of its external commercial relations, which is guaranteed under the Basic Law.

The WTO provides a fair, predictable and rules-based multilateral trading system for trade in goods, services and trade-related intellectual property rights. It promotes the liberalisation of international trade and serves as a forum for multilateral trade negotiations and dispute settlement among its members. Active participation in the WTO's multilateral trading system is the cornerstone of the HKSAR's external trade policy.

As a small and totally open economy, the HKSAR's participation in the WTO is guided by two objectives: firstly, to sustain the momentum of trade liberalisation, especially in areas of interest to the HKSAR, such as tariffs and services; secondly, to strengthen and update the multilateral rule-based trading system so that it remains an effective framework to promote trade expansion and liberalisation, as well as to protect Hong Kong against any arbitrary and discriminatory actions taken by its trading partners.

2

These include management consulting, convention and exhibition, advertising, accounting, real estate and construction, medical and dental, distribution, logistics, freight forwarding, storage and warehousing, transport, tourism, audiovisual, legal, banking, securities, insurance and telecommunications services.

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