Economic relations between the Mainland and Hong Kong will enter a new phase with the full implementation of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) on January 1, 2004.

"Hong Kong is fully prepared to launch the liberalization measures for trade in goods and trade in services under CEPA," said a Trade and Industry Department (TID) spokesman today (Tuesday 30 December). "Our colleagues have been working very hard in the past three months to ensure that everything will go smoothly on day one."

Starting from 1 January 2004, goods of Hong Kong origin in 374 Mainland 2004 tariff codes (previously 273 items according to the 2001 Mainland tariff codes) will enjoy zero tariff when exported to the Mainland. Market access to 18 services sectors in the Mainland will be liberalized. Hong Kong service suppliers will have earlier and wider access to the Mainland market, ahead of China's WTO timetable. For some sectors, CEPA even goes beyond China's WTO commitments.

On trade in goods, manufacturers and exporters can start making applications for a CEPA Certificate of Hong Kong Origin (CO(CEPA)) as from today (30 December) to TID or one of the five Government Approved Certification Organizations (i.e. Chinese Manufacturers' Association of Hong Kong; Federation of Hong Kong Industries; Hong Kong General Chamber of Commerce; Indian Chamber of Commerce, Hong Kong; and Chinese General Chamber of Commerce).

"We have close cooperation with the Mainland Customs to enforce the relevant provisions of CEPA. Information on CO(CEPA) will be transmitted to the Mainland Customs through electronic means to facilitate verification at ports of entry," added the spokesman. "Apart from more effective regulation, the use of IT would ensure the speedy movement of goods across the control points."

For other Hong Kong origin products not covered under the 374 Mainland product codes, manufacturers who wish to include their goods in the next phase of tariff elimination can submit applications to TID between 1 January to 31 March 2004. Application details can be found on the CEPA website (www.tid.gov.hk/english/cepa/).

On the services side, a dedicated team of 15 TID officers are providing a one-stop certification service of Hong Kong Service Suppliers (HKSS). A Certificate of HKSS is a prerequisite when a company wishing to enjoy preferential treatment under CEPA applies to the Mainland authorities to provide the relevant services. "Of the 44 applications received since October this year, 16 were approved," the TID spokesman said. "We would normally be able to approve an application within 14 working days if the applicant have submitted all the necessary documents and meets all the eligibility criteria set out in Annex 5 of CEPA."

TID adopts a multi-pronged approach to keep the business sector updated about CEPA -

"We have handled more than 5,700 enquiries since September. Our CEPA website has more than 410,000 hits and we have spoken in over 70 public events organized by TID, chambers of commerce, trade associations, industrial organizations and other interested parties," the spokesman added.

The Arrangement has been notified to the WTO on 27 December, 2003. The notification serves to ensure transparency by informing WTO Members of the signing and entry into force of CEPA and giving WTO Members the opportunity to examine CEPA in future WTO meetings. It also underscores the commitment of both the People's Republic of China and Hong Kong, China to CEPA's WTO-consistency.

The Government of the Hong Kong Special Administrative Region and the Central People's Government signed the main parts of CEPA on June 29, 2003. The six Annexes to the main text of CEPA were subsequently signed on September 29, 2003 after implementation details of CEPA were finalized.

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