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opportunities for entrepreneurial growth; growth and stability: key for APEC integration; commitment to sustainable growth; and experiencing our diversity.

PECC is a non-governmental regional forum comprising government officials, business leaders and academics who work in their personal capacity on practical policy issues to enhance trade, investment and economic development in the Pacific region. The Hong Kong Committee for Pacific Economic Cooperation, which advises on and coordinates Hong Kong's participation in and input to the PECC process, continues to play an active role in PECC's various fora, task forces and project groups.

Observer Role in the OECD

The HKSAR is an observer on the Trade Committee and the Committee on Financial Markets of the Paris-based OECD, which are important fora for discussions on policy matters in respect of trade and financial services. Ideas introduced in these committees are often followed up in other international organisations such as the WTO and eventually translated into binding multilateral agreements or codes.

Regional Trade Agreements

The HKSAR Government remains, as always, committed to the primacy of the multilateral trading system under the WTO. That notwithstanding, the Government is open-minded about exploring free trade agreements (FTAs) with trading partners so long as they are in Hong Kong's interests, consistent with WTO provisions and contribute to multilateral trade liberalisation.

Mainland and Hong Kong Closer Economic Partnership Arrangement

With implementation of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)2 on January 1, 2004, the Mainland applied zero import tariff for goods of Hong Kong origin covered in 374 Mainland 2004 tariff codes. The Mainland has also given preferential market access to Hong Kong service suppliers in 18 services sectors3. In addition, the relevant professional and regulatory bodies of Hong Kong and the Mainland have concluded various agreements or arrangements on examinations or mutual recognition of professional qualifications4. to promote the exchange of talent between the two places. On trade and investment facilitation, working groups have been set up to discuss measures in seven areas of cooperation under CEPA. The Joint Steering Committee, led by the Financial Secretary of the HKSAR Government and the Vice Minister of Commerce of the Central People's Government (CPG), is responsible for overall coordination of CEPA.

CEPA adopts a building block approach and provides a mechanism for further liberalisation measures. To further broaden the coverage of CEPA, the CPG and the

2

The main part of CEPA was signed on June 29, 2003 and its six Annexes on September 29, 2003. 3 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.

4

These include estate surveyors, qualified personnel and expertise in respect of securities and futures, architects, insurance practitioners, patent agents, structural engineers and accountants.