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HONG KONG, Sept. 29 (Xinhuanet) -- The signing here on Monday of the six
annexes to the main text of the Closer Economic Partnership Arrangement (CEPA)
between Hong Kong and Chinese mainland is set to bring more business
opportunities to both sides, said senior trade officials.
Speaking at the signing ceremony, Vice Minister of Commerce An Min and Hong
Kong's Financial Secretary Henry Tang also shared the view that the CEPA is a
continuous and open agreement, adding that more efforts will be made to enhance
and broaden its content. The framework CEPA accord was signed on June 30.
The annexes, which set out the arrangement's implementation details,
include arrangements for implementation of zero tariff for trade in goods; rules
of origin for trade in goods, procedures for the issuing and verification of
certificates of origin; specific commitments on liberalization of trade in
services; the detailed definition of "Service Supplier" and related
requirements;and trade and investment facilitation.
Speaking at a press conference after the signing ceremony, Hong Kong's
Secretary for Commerce, Industry and Technology John Tsang said CEPA holds good
potential to open up many more new business opportunities in Chinese mainland
for Hong Kong as well as to enhance Hong Kong's attractiveness to overseas
investors.
"We believe that the zero import tariff preference will make itmore
attractive to undertake in Hong Kong manufacturing of brand name products, or
manufacturing processes with high-value-added content or substantial
intellectual property input," said Tsang.
"The WTO-plus market liberalization measures for trade in services would
also give enterprises in Hong Kong a 'first mover' advantage," he said.
On trade in goods, the mainland has agreed to eliminate tariffson imported
goods of Hong Kong origin in stages. Starting from Jan.1, 2004, a total of 273
mainland product codes meeting CEPA rules of origin will enjoy zero tariffs.
For other products, the mainland will apply zero tariff no later than Jan.
1, 2006 upon applications by local manufacturers and upon CEPA rules of origin
being agreed upon and met.
For 70 percent of the 273 mainland product codes covered in the initial
phase, Hong Kong's existing process-based origin rules will be adopted as the
CEPA origin rules. For the rest, either the "Change in Tariff Heading" approach
or the "30 percent value-added" requirement will be used.
"While the 30 percent rule already compares favorably with other free-trade
agreements whose thresholds range from 40 percent to 60 percent, product
development costs will also be counted in the calculation in the case of CEPA,"
Tsang said.
On trade in services, the two sides have agreed on some
furtherclarifications and refinements regarding the liberalization of the 17
sectors of services agreed and announced.
Moreover, Chinese mainland has also agreed to grant preferential treatment
in one additional sector, telecoms services,taking the total number of sectors
covered under CEPA to 18. In addition, equity participation in mainland
insurance companies will also be relaxed.
As regards the definition of "Hong Kong Service Suppliers", generally
speaking, "juridical persons" include companies, partnerships, sole
proprietorships. "Juridical persons" and "natural persons" of Hong Kong will be
able to enjoy preferential treatment provided that they fulfill the definition
and related requirements of Hong Kong service suppliers stipulated in
relevantannex of CEPA.
Unless otherwise specified in CEPA, a "natural person" means a Hong Kong
permanent resident whereas a "juridical person" means any legal entity duly
constituted or otherwise organized under theapplicable laws of Hong Kong and
which has engaged in substantive business operations in Hong Kong for three to
five years.
Hong Kong's Trade and Industry Department will provide the one-stop enquiry
and certification services for the implementation of CEPA in Hong Kong. A
designated branch has been set up in the department to handle public enquiries,
disseminate practical information and process applications for the certification
of "Hong Kong Service Suppliers."
With regard to trade and investment facilitation, both sides agreed on the
contents and modalities of cooperation for each of the seven areas which are
stipulated in the main parts of CEPA, and that new areas of trade and investment
facilitation might be added in the future.
With a view to broadening CEPA's scope and coverage, the two sides will
pursue further liberalization on goods and services trade in the latter phases.
A Joint Steering Committee, responsible for overall coordination of CEPA, will
be set up soon. It will be jointly chaired by Financial Secretary Henry Tang and
Vice Minister of Commerce An Min.
"CEPA adopts a building-block approach and provides a mechanismfor further
liberalization measures. In formulating the strategy for the subsequent phases
of CEPA, we will continue to consult thebusiness and professional communities to
understand their needs," Tsang said.
"We will also discuss with the concerned business sectors on appropriate
policy measures that may be required to enable them togain the greatest benefits
from CEPA," he added. Enditem
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