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Notwithstanding the Government's commitment to the primacy of the multilateral
trading system under the WTO, it is accepted that free trade agreements
(FTAs) may contribute to multilateral trade liberalisation if they are
fully WTO-consistent. The Government is, therefore, prepared to consider
negotiating FTAs with trading partners so long as these would be in Hong
Kong's interests and contribute to multilateral trade liberalisation.
The HKSAR Government and the Central People's Government (CPG) signed
the main text of the Mainland and Hong Kong Closer Economic Partnership
Arrangement (CEPA) on June 29, 2003, and concluded the six Annexes on
September 29, 2003. Under CEPA, the Mainland has agreed to eliminate import
tariff for 374 Hong Kong products under its 2004 tariff codes and to give
preferential market access to Hong Kong service suppliers in 18 services
sectors2. Both sides have also agreed to enhance cooperation
in trade and investment facilitation. CEPA came into full operation on
January 1, 2004. It adopts a building block approach and provides a mechanism
for further liberalisation measures. A Joint Steering Committee, jointly
led by Financial Secretary of the HKSAR Government and the Vice Minister
of Commerce of the CPG, is responsible for overall coordination of CEPA.
The establishment of the CEPA under the framework
of the WTO will further promote trade and investment flows, as well as
exchanges of talent, capital and technology, between Hong Kong and the
Mainland, which would be mutually beneficial and conducive to sustained
economic growth. Since the announcement of CEPA, the Government has launched
a strong awareness and publicity campaign to promote the business opportunities
brought about by CEPA to local, foreign and Mainland investors.
Negotiations with New Zealand on a free trade agreement continued. The
negotiations encompassed a wide-ranging scope with emphasis on trade and
investment liberalisation and facilitation. The two sides have achieved
good progress on many issues and are committed to concluding the negotiations
as soon as possible to achieve a high-quality agreement that is beneficial
to both economies.
The HKSAR is a founding member of the WTO. Its separate membership reflects
Hong Kong's autonomy in the conduct of its external commercial relations,
which is guaranteed under the Basic Law.
The WTO provides a fair, predictable and rules-based
multilateral trading system for trade in goods, services and trade-related
intellectual property rights. It promotes the liberalisation of international
trade and serves as a forum for multilateral trade negotiations and dispute
settlement among its members. Active participation in the WTO's multilateral
trading system is the cornerstone of the HKSAR's external trade policy.
As a small and totally open economy, the HKSAR's participation
in the WTO is guided by two objectives: firstly, to sustain the momentum
of trade liberalisation, especially in areas of interest to the HKSAR,
such as tariffs and services; secondly, to strengthen and update the multilateral
rule-based trading system so that it remains an effective framework to
promote trade expansion and liberalisation, as well as to protect Hong
Kong against any arbitrary and discriminatory actions taken by its trading
partners.
The HKSAR participates actively in the new Round
of multilateral trade negotiations launched at the WTO's Fourth Ministerial
Conference in Doha, Qatar, in November 2001. Its priority in this round
of trade negotiations is to seek greater market access for its services
sectors and industrial goods.
In September 2003, the HKSAR took part in the Fifth
Ministerial Conference held in Cancun, Mexico, which aimed to take stock
of the progresss of negotiations and give further instructions to take
them forward. The conference ended without consensus on the direction
of the negotiations due to members' divergent positions on some of the
key issues. However, by the end of 2003, WTO members had already demonstrated
a strong sense of re-engagement for continuous negotiations. The new Round
of negotiations is scheduled for completion by January 1, 2005. Hong Kong's
business community will benefit from the positive outcome of further multilateral
trade negotiations.
As a further demonstration of its commitment to the
WTO, the HKSAR has offered to host the Sixth WTO Ministerial Conference.
The offer was unanimously accepted by the WTO members in October 2003
although the date has yet to be decided. Besides enhancing Hong Kong's
involvement in all key negotiations, hosting of the conference will help
raise its international profile, induce considerable economic benefits
in the form of tourist receipts, and attract future overseas tourists,
international conferences and other business opportunities.
As an integral part of the Asia-Pacific economy and an important services,
financial and trading centre, Hong Kong continued to play an active role
in enhancing regional economic cooperation. Its economic links with the
region remained strong. In 2003, some 83 per cent of Hong Kong's total
external trade was conducted with the other 20 member economies of APEC.
Hong Kong participates as a full and separate member in APEC and PECC
under the name Hong Kong, China.
APEC is a regional forum set up in 1989 for high-level
government-to-government dialogue and cooperation on trade and economic
issues. Hong Kong joined the forum in 1991. In October, the Chief Executive
represented the HKSAR at the 11th APEC Economic Leaders Meeting held in
Bangkok, Thailand. The meeting was preceded by the 15th APEC Ministerial
Meeting, at which the Secretary for Commerce, Industry and Technology
represented the HKSAR.
APEC pursues its goal of free and open trade and investment
by 2010 for industrialised economies and 2020 for developing economies
through work in three areas — trade and investment liberalisation,
trade and investment facilitation, and economic and technical cooperation.
Hong Kong participates actively in all three. It has been a Vice-Chair
of APEC's Committee on Trade and Investment (CTI) since 1996.
Thailand, as the APEC Chair for 2003, has set the
overall theme as 'A World of Differences: Partnership for the Future',
with five sub-themes: knowledge-based economy for all; promoting human
security; financial architecture for a world of differences; new growth
enterprises: SMEs and micro business; and act on development pledge. Hong
Kong had its 2002 Individual Action Plan reviewed by other APEC members
in August and was commended for its continued openness and commitment
to free and open trade and investment.
PECC, founded in 1980, is a non-governmental regional
forum comprising government officials, business leaders and academics
who work in their personal capacity on practical policy issues to enhance
trade, investment and economic development in the Pacific region. Hong
Kong joined this forum in May 1991. The Hong Kong Committee for Pacific
Economic Cooperation, established in March 1990 to advise on and coordinate
Hong Kong's participation in and input to the PECC process, continues
to play an active role in PECC's various fora, task forces and project
groups.
The HKSAR is an observer on the Trade Committee and the Committee on
Financial Markets of the Paris-based OECD, which are important fora for
discussions on policy matters in respect of trade and financial services.
Ideas introduced in these committees are often followed up in other international
organisations such as the WTO and eventually translated into binding multilateral
agreements or codes.
China formally acceded to the WTO on December 11, 2001. It is generally
expected that China's broad market-opening commitments for accession to
the WTO, as well as the enhanced accessibility to overseas markets as
provided for under the WTO agreements, will boost the Mainland's overall
economic growth. The Mainland is Hong Kong's largest trading partner and
there is a strong economic link between the two places. The Mainland's
accelerated economic growth is expected to usher in enormous business
opportunities for Hong Kong. The anticipated surge in trade flow and the
improvement of the investment environment in the Mainland brought about
by China's accession to the WTO should help boost Hong Kong's external
trade and intermediary services. In addition, CEPA will open up many business
opportunities in the Mainland for Hong Kong businessmen, and enhance the
attractiveness of Hong Kong to overseas investors.
The Government is committed to facilitating businessmen's
efforts in tapping the Mainland market, particularly the opportunities
brought about by China's accession to the WTO and CEPA. It maintains close
contact with the Mainland authorities at different levels through various
government bureaux and departments, the Beijing Office of the HKSAR Government,
the Hong Kong Economic and Trade Office in Guangdong as well as quasi-government
bodies like the Hong Kong Trade Development Council (TDC). Regular high-level
communication is also achieved through mechanisms such as the Hong Kong/Guangdong
Cooperation Joint Conference, the Hong Kong/Shanghai Economic and Trade
Cooperation Conference and the CEPA Joint Steering Committee.
Hong Kong's textiles exports to the European Union, Canada and the United
States are subject to certain quantitative restrictions. In accordance
with the WTO Agreement on Textiles and Clothing (ATC), these quantitative
restrictions are being phased out over 10 years, in four stages from January
of 1995, 1998, 2002 and 2005, respectively. All quantitative restrictions
will have been eliminated from January 1, 2005. Hong Kong has been closely
monitoring the implementation of the ATC and the operation of the Textiles
Monitoring Body, the ATC's supervisory body. Through cooperation with
the International Textiles and Clothing Bureau (of which Hong Kong, China
was the Chairman from January 1999 until September 2002), Hong Kong and
a group of developing country exporters of textiles have been working
together to ensure that the liberalisation process under the ATC is on
course and to explore possibilities for further liberalisation.
Hong Kong continues to cooperate with its trading
partners in combating illegal transhipment of textiles. Among other things,
to promote understanding of Hong Kong's anti-transhipment efforts, Hong
Kong Customs officers conduct joint factory observation visits in conjunction
with US Customs representatives. Such visits are not acts of law enforcement.
In 2003, one round of a joint factory observation visit was conducted.
To combat false declarations of origin and values
of goods and illegal transhipment of textiles, the Customs and Excise
Department in 2003 carried out 96 063 factory and consignment inspections
and 1 284 investigations. The department also conducted 976 'blitz' check
operations on textile consignments at various import and export control
points. It successfully prosecuted 820 offenders, resulting in the imposition
of fines amounting to $18.87 million. It operates a monetary reward scheme
to elicit information on textiles origin fraud.
To ensure that Hong Kong has continued access to advanced products and
technologies to sustain its economic development and that Hong Kong will
not be used as a conduit for illicit diversion of strategic commodities,
the Government maintains a comprehensive import and export control system
to monitor the flows of strategic commodities through Hong Kong. The licensing
control system for strategic commodities is administered by the Trade
and Industry Department with the support of vigorous enforcement action
by the Customs and Excise Department. Hong Kong maintains close cooperation
with its trading partners to keep itself abreast of the developments in
the international arena on strategic trade control matters, and to make
sure that its control arrangement is complementary to those of its trading
partners.
The Chemical Weapons (Convention) Ordinance, which
was passed by the Legislative Council in July, enables the Government
to fully implement the Chemical Weapons Convention in Hong Kong. It underlines
Hong Kong's commitment to internationally agreed arrangements on the ban
of chemical weapons and on the monitoring of activities involving sensitive
chemicals. It also helps enhance Hong Kong's international reputation
in the area of strategic trade control, and helps ensure its continued
access to a full range of chemicals needed for local industrial, medical,
research and trading purposes.
In 2003, the Customs and Excise Department investigated
251 cases of unlicensed import and export of strategic commodities and
prosecuted 51 offenders, resulting in fines amounting to $2.28 million.
Goods valued at $2.78 million were seized and confiscated.
Hong Kong has bilateral investment promotion and protection agreements
with 14 economies: Australia, Austria, Belgium/Luxembourg, Denmark, France,
Germany, Italy, Japan, Republic of Korea, the Netherlands, New Zealand,
Sweden, Switzerland and the United Kingdom. A primary objective of these
agreements is to assure overseas investors of the stable investment environment
in Hong Kong.
Hong Kong Customs plays an active role in the work of the World Customs
Organisation (WCO), which aims to enhance the effectiveness and efficiency
of customs administrations and facilitate trade by achieving harmony and
uniformity of customs procedures among its members and the Sub-committee
on Customs Procedures (SCCP) of APEC, which is tasked to simplify and
harmonise customs procedures to facilitate cross-border trade in the Asia-Pacific
region. As at December, the WCO has a world-wide membership of 162 Customs
administrations, and APEC has 21 member economies.
In the WCO forum, the department works closely with
the WCO Vice-Chairman representing the Asia-Pacific region on regional
matters, and is a co-coordinator of regional activities on enforcement
programmes in the areas of security, commercial fraud, smuggling and intelligence,
customs-business partnership and integrity.
In the APEC SCCP forum, the department works closely
with member economies on trade facilitation work, and is a co-coordinator
of SCCP Collective Action Plans on Public Availability of Information,
Customs Integrity and Customs-Business Partnership.
To promote counter-terrorism work, the department
participates actively in the WCO Task Force on Security and Facilitation
of the International Trade Supply Chain and the APEC Counter-Terrorism
Task Force.
The department maintains a close liaison with the
WCO Regional Intelligence Liaison Office (RILO) in Tokyo. Since Tokyo
started hosting the RILO in 1999, the department has seconded two officers
to support intelligence analysis and coordination among members in the
Asia-Pacific region.
The RILO office will be relocated to Beijing with
effect from 2004. The department will continue to provide full support
to the project by seconding an officer to the Beijing Office in order
to enhance the regional intelligence network by exchanging timely intelligence
and offering investigative assistance to regional members.
Recognising the importance of international cooperation
with other customs administrations and law enforcement agencies in combating
transnational customs crimes, the department maintains a good working
relationship and close liaison with the customs attachés and the
representatives of other law enforcement agencies stationed in 12 consular
missions in Hong Kong. Through regular bilateral meetings, the department
has enhanced mutual cooperation with the Mainland and other customs administrations
in building up a strong network for combating transnational customs crimes.
In the aftermath of the September 11, 2001 incident, the US Bureau of
Customs and Border Protection proposed the Container Security Initiative
(CSI) to address the perceived risks of terrorist attacks associated with
ocean-going containers destined for the United States. Under the CSI,
the customs authority of a participating foreign port will work with the
US Customs officers stationed abroad to identify containers that carry
a high risk of being exploited for terrorist attacks. The customs authority
of the participating port will scan or inspect the identified containers
before the containers depart the port for the United States. Following
careful consideration and discussion with the local exporting and shipping
communities, Hong Kong agreed to join the CSI, and the Hong Kong and US
Customs signed a 'Declaration of Principles' on this in September 2002.
Hong Kong's participation in the CSI would help ensure the smooth flow
of US-bound cargo that originated from Hong Kong, and enhance the security
of the global maritime trading system. Both are vital to Hong Kong as
a major trading entity and as the world's busiest container port. A CSI
pilot scheme was launched in Hong Kong on May 12, 2003.
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These include management consulting, convention and
exhibition, advertising, accounting, real estate and construction,
medical and dental, distribution, logistics, freight forwarding,
storage and warehousing, transport, tourism, audiovisual, legal,
banking, securities, insurance and telecommunications services. |
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