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Press Release

Hong Kong OPA textile products excluded from Mainland export duty
Tuesday, May 24, 2005

Hong Kong-origin textile and clothing products that undergo outward processing in the Mainland will be exempted from export duty imposed by the Mainland. 

This was agreed in the Joint Steering Committee meeting of CEPA, chaired by the Director General-of Trade and Industry, Mr Raymond Young and the Director-General of the Department of Taiwan, Hong Kong and Macao Affairs, Ministry of Commerce, Mr Wang Liao-ping in Beijing today (May 24).

The Secretary for Commerce, Industry and Technology, Mr John Tsang, welcomed the decision to exempt Hong Kong textile and clothing products imported to the Mainland for outward processing arrangements (OPA) from the recently imposed export duty measure.

"We note the recent development on the export duty measure imposed by the Mainland and fully understand the concern of Hong Kong traders on the significant increase in their production cost as a result.

"In particular, I have raised this matter with the Commerce Minister Bo Xilai during our Informal Ministerial Meeting of the World Trade Orgainzation in Paris earlier this month to explore how Hong Kong OPA goods could be exempted. In my letter to Minister Bo last week, we have also pledged full co-operation with the Mainland Customs to work out the mechanics for processing OPA goods through electronic means.

"I am glad to note that the Mainland has responded promptly and favorably to our concern. The Ministry of Commerce's decision would certainly help eliminate the adverse impact on our textile and clothing exports," Mr Tsang said.

The Mainland Government promulgated earlier that the export duty of 40 Mainland 8-digit tariff codes would be adjusted with effect from June 1. 

A working group has been formed by the Mainland and Hong Kong to work out technical details with a view to implementing the exemption arrangement with effect from July this year. 

The meeting also reached consensus that the automatic export licensing measure applied on exports to Hong Kong will be dispensed with. 

The exclusion of Hong Kong OPA products from the export duty arrangements and the discontinuation of the automatic export licensing measure were discussed under the CEPA framework and a supplement will be signed later to endorse the agreement.

Ends