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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Press Release

Hong Kong's stance on trade agreements explained
Thursday, March 10, 2005

The Director-General of Trade and Industry, Mr Raymond Young, today (March 10) gave an overview on Hong Kong's positions on multilateral trade and regional trade agreements (RTAs).

Speaking at the WTO and Greater China Economic Area Law Conference organised by the City University of Hong Kong, Mr Young said multilateralism had all along been the cornerstone of Hong Kong's economic and trade policy and RTAs would remain at best a supplement to the benefits that Hong Kong could gain from a truly open multilateral trading system.

"For a place like Hong Kong where trade accounts for almost three times our GDP, we certainly have a strong interest in liberalising the global trade, and I do not see any other vehicle which can work as efficiently as the WTO in the promotion and protection of our trade interest," Mr Young told the conference.

"In the WTO we are an equal among the major economic powers in voicing our trade concerns and putting forward suggestions on how these concerns should be addressed. WTO also provides a level field for us to guard our trade interests against arbitrary and discriminatory trade actions by our trading partners," he said.

Mr Young said Hong Kong had tried its best to contribute to the work of the WTO by being the bridge between different camps; by putting forward honest and practical recommendations that stand a chance of being accepted by all Members; and above all, by pledging Hong Kong's full support to the WTO by offering to host the Sixth Ministerial Conference in Hong Kong in December this year.

Commenting on the coming Ministerial Conference, Mr Young said WTO Members had to attain substantial outcomes at the Conference if they were to achieve the objective of a timely and successful conclusion of the negotiations under the Doha Development Agenda by 2006, and an early and successful conclusion of the Doha Round would help restore confidence in the multilateral trading system.

On RTA, Mr Young said Hong Kong recognised that high standard and WTO-consistent RTAs did contribute to global trade liberalisation by providing better market access and creating a more favourable business environment among the parties.

He said it was with these considerations in mind and in response to the requests of Hong Kong's business community that the Closer Economic Partnership Arrangement (CEPA), the first ever RTA signed between the Mainland and Hong Kong, was concluded. Mr Young gave a highlight of trade liberalisation and economic benefits brought by CEPA:

  • the CEPA now offers zero import tariff for a total of 1,108 Hong Kong goods under the Mainland 2005 tariff codes, and provides preferential market access to services and service suppliers of Hong Kong in a total of 26 service areas;

  • HKSAR in return agreed to continue to apply zero tariff to all goods of Mainland origin, and not to impose any new discriminatory measures on Mainland’s service suppliers in the areas covered by CEPA ;

  • both sides have put in place co-operative measures for trade and investment facilitation between the two places in seven specific areas of interest ;

  • the tariff preference under CEPA increases the competitiveness of Hong Kong-made products in the Mainland consumer market, and benefits consumers in the Mainland;

  • the opening up of the service sectors in the Mainland to Hong Kong gives our service suppliers a 'first mover' advantage and wider access to the Mainland, which in turn attracts more investment and talents from Hong Kong into the mainland. In the longer run, this will nurture the growth of the Mainland's service industries and accelerate their integration into the global economy; and

  • the closer cooperation and integration between the two places will strengthen Hong Kong's unique role as a platform to attract foreign investments to Hong Kong and the Mainland.

Mr Young said Hong Kong and the Mainland had taken extra care to ensure that the CEPA would be fully consistent with the WTO requirements on RTA. 

"The first examination exercise of the CEPA by WTO Members has just been concluded last month in Geneva, and we will continue to fully cooperate with the WTO Members in the remaining examination process of CEPA," he added.

Ends