Press Release - June 14, 2004

The Closer Economic Partnership Arrangement (CEPA), the free-trade pact that Hong Kong has negotiated with its sovereign power, represents the first free-trade agreement signed by either China or Hong Kong, the Director of the Hong Kong Economic and Trade Office (Canada), Mr Bassanio So, said today (June 14).

�It is one of the strongest examples of �One Country, Two Systems� and underscores China�s commitment to the rule-based global trading system,� he said.

�Although CEPA is a free-trade agreement between Hong Kong and Mainland China, overseas companies, including Canadian companies, will benefit from it.�

Addressing a business seminar entitled "CEPA � A New Expressway to China Through Hong Kong", Mr So said CEPA permitted Canadian companies partnering with Hong Kong earlier access to the Mainland China market, ahead and beyond China�s World Trade Organization commitment.

He said: �CEPA provides market liberation commitments towards Hong Kong companies which eliminates tariffs on 90% of Hong Kong goods exported to 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 China.�

�So how can manufacturers or exporters make use of CEPA to enjoy tariff free treatment? The benefits can be immediate. The key issue is that as long as your products is �made in Hong Kong�, satisfying the rules of origins, 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.�

The "CEPA � A New Expressway to China Through Hong Kong" business seminar was jointly organized by HKETO, Mississauga Board of Trade and Mississauga Board of Chinese Professionals and Businesses. It examined the landmark free-trade agreement between Hong Kong and Mainland China to provide market liberalization commitments towards Hong Kong � ahead of and beyond China�s World Trade Organization (WTO) commitments, and how Canadian companies could leverage on the advantages under the CEPA framework.

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 export to China enjoy zero tariffs. Since CEPA adopts a building block approach and provides a mechanism for further liberalization measures, by January 2006, all exports from Hong Kong meeting the rules of origin will be exempt from tariff.

As for trade in services, currently 18 services sectors are covered under CEPA. In some sectors, like real estates 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 the trade and investment facilitation, Hong Kong and Mainland China agreed on enhancing co-operation for seven areas which include trade and investment promotion, transparency in laws and regulations and cooperation of small and medium enterprises.

Other speakers at the seminar were the Director of 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. They provided practical advice and experience sharing on how Canadian companies could gain faster and better access into the Mainland China market under the CEPA framework.

For more information on CEPA, please visit HKETO website: www.hketo.ca


For further information, please contact John Tam, Chief Information Officer at
(416) 924-5544, email [email protected] or Elison Chu, Senior Information Officer, [email protected].