Asian Economic News: China, Macao sign free-trade pact

HONG KONG, Oct. 17 Kyodo

China and Macao signed a free-trade pact and its implementation details on Friday to give tariff-free entry for goods and easy access for 18 service sectors from the former Portuguese enclave into the mainland Chinese market.

The agreement, known as the Closer Economic Partnership Arrangement (CEPA), will be effective from Jan. 1 and was similar to the deal inked between mainland China and Hong Kong earlier.

Chinese Vice President Zeng Qinghong and Macao's Chief Executive Edmund Ho attended the deal's signing ceremony in the Government House of Macao on Friday afternoon.

''The main objective of CEPA is to provide a preferential treatment, in terms of market access, to individuals and enterprises in Macao into the mainland (China) in consistency with the WTO (World Trade Organization) rules of regional economic cooperation,'' the Macao government said of its introduction to the deal.

China's free-trade pacts with Hong Kong and Macao are widely considered as Beijing's support for the economies of the two Chinese special administrative regions, which are undergoing restructuring problems.

Under the pact with Macao, Beijing agreed to eliminate tariffs on 273 products originating from the small gambling city that returned to Chinese rule in December 1999.

That covers 93% of the enclave's goods exported to China, including food and beverages, chemical products, pharmaceutical goods, cosmetics, plastic articles, paper articles, textiles and clothing, jewelry, electrical and electronic products, optical apparatus, clocks, watches and musical instruments.

Other goods not included in the current list will enjoy tariff-free treatment no later than Jan. 1, 2006, according to the CEPA documents.

The deal also granted China's concessions on market access for 18 service sectors in Macao.

The industries to be benefited are: legal services, accountancy, architecture, medical and dental services, real estate, advertising, management consultation, convention and exhibition services, value-added telecommunications, audio-visual services, construction, distribution, insurance, banking, securities, tourism, transport and logistics.

On trade and investment facilitation, China and Macao agreed to strengthen their cooperation in areas such as investment promotion, customs clearance, commodity inspection, electronic business, transparency in laws and regulations, and cooperation among small and medium-sized firms.