WT/REG390/M/1  
 
30 April 2019 
(19-2946) Page: 1/3 
Committee on Regional Trade Agreements  
Ninety -second  Session    
 
CLOSER ECONOMIC PART NERSHIP ARRANGEMENT BETWEEN HONG KONG, C HINA AND 
MACAO, CHINA  
(GOODS  AND SERVICES ) 
NOTE ON THE MEETING OF 1 APRIL 2019  
Chairm an: Ambassador Carlos Mario FORADORI (Argentina)  
1.1.  The 92nd Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/17/Rev.1 dated 22 March 2019.  
1.2.  Under Agenda Item F.I of the Session, the CRTA considered the  Closer Economic Partnership 
Arran gement between Hong Kong, China and Macao, China (goods and services ), (hereinafter  "the 
Agreement").  
1.3.  The Chairman  noted that the Agreement  had entered into force on 27 October 2017.  It had 
been notifie d to the WTO by the Parties on 18 December 2017 under Article  XXIV:7(a) of the 
GATT  1994 and the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an 
Agreement establishing a free trade area (document  WT/REG3 90/N/1)  and under 
GATS  Article  V:7(a) as an Agreement providing for the liber alization of trade in services within the 
meaning of Article V of the GATS (document S/C/N/ 898). The text of the Agreement was available, 
together with its Annexes, on the Parties' official websites.  The Factual Presentation on the goods 
aspect s (document  WT/REG 390/1 dated 5 September 2018) and  questions and replies on th e 
Agreement (document WT/REG390 /2 dated 8 November 2018) ha d been distributed.   
1.4.  The representative of Hong Kong, China  thanked the Secretariat for preparing the factual 
presentation, which succinctly captured the key elements of the Hong Kong, China -Macao , China  
CEPA. She also thanked colleagues from Macao, China for their cooperation and concerted efforts in 
preparing for the meeting.  
1.5.  The Agreement signified Hong Kong, China's resolve to pu rsue free and open trade and 
investment with its neighbouring economy. Both Hong Kong, China and Macao, China were known 
for their highly liberalized trade regimes. For Hong Kong, China, establishing the Agreement would 
provide legal certainty to market ac cess, which would in turn enhance trade and investment flow s 
between the two places, and provide the framework for further collaboration conducive to long -term 
economic growth and development.  
1.6.  The Agreement which built upon the Parties' WTO commitments in  many areas, was fully 
consistent with the WTO agreements. It was a comprehensive free trade agreement encompassing 
many areas. On trade in goods, while neither Hong Kong, China nor Macao, China applied tariff or 
tariff rate quotas against imports of goods  from each other, both Parties had committed to bind their 
existing regimes to provide legal certainty to the tariff -free movement of goods. On trade remedy 
measures, the two sides had also gone beyond their WTO commitments to agree not to take anti -
dumpin g or countervailing measures against goods from each other.  
1.7.  On trade in services, the Parties had made broad commitments covering a comprehensive list 
of services sectors. Some services commitments were not only more preferential than their 
respective com mitments under the GATS, but also exceeded the revised offers under the Doha 
Round of negotiations.  WT/REG390/M/1  
 
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  1.8.  Apart from market access commitments, the two sides had agreed on other general obligations 
to facilitate trade in services. In particular, the rules and d isciplines developed under the Agreement 
would improve transparency of domestic regulations and ensure that they did not constitute 
unnecessary barriers to trade in services. With a view to further enhancing investment flows, the 
Parties had agreed in prin ciple to discuss a separate instrument on investment. The discussions 
would cover elements of investment promotion and protection that were typically found in modern 
investment agreements.  
1.9.  The Agreement also contained provisions to enhance cooperation in a reas including customs 
procedures and trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, 
intellectual property, as well as transparency in laws and regulations, with details set out in a 
separate work programme on economi c and technical co -operation.  
1.10.   The Agreement had entered into force on 27 October 2017 and its implementation had been 
smooth so far. Hong Kong, China was a staunch supporter of free trade and remained firmly 
committed to the multilateral trading system. In  pursuing RTAs, Hong Kong, China built upon the 
solid foundation of rules and market access commitments agreed under the WTO. While Hong Kong, 
China was satisfied with the outcome of its bilateral and plurilateral negotiation s outside the WTO, 
it held the  unwavering belief that multilateral negotiations in the WTO remain ed the best approach 
for economic integration and progressive liberalisation of the world economy.  She looked forward to 
the discussion in the Committee.  
1.11.   The representative of Macao, China  thank ed the Secretariat for the preparation of  the factual 
presentation , Members for their written questions  and colleagues from Hong Kong, China for their 
collaboration in preparing for the meeting.  The Agreement was  the second FTA that Macao, China 
had signed with another WTO Member, the first being the Mainland and Macao , China  Closer 
Economic Partnership Arrangement, which had been  signed in 2003. Both agreements were built 
upon the solid foundation of economic and social ties that Macao, China ha d established in the river 
of its history.  
1.12.   Indeed, Hong Kong, China was the largest merchandise export destination and the fifth largest 
source of imports of Macao, China in 2018, with a bilateral trade volume of 14.6 billion patacas. In 
terms of investment, H ong Kong, China had always been  among the top largest  source of foreign 
direct investment into Macao, China , enriching it with diverse talents and a wide array of goods and 
services, especially during its early years of economic development in the 20th cen tury. 
1.13.   With this background of trade and economic intersections, both sides were of the view that 
the signing of a n FTA would contribute to the bilateral relationship in terms of trade and technical 
cooperation in various areas of mutual interest. Thus, the  negotiation  of the Agreement  had 
commenced in November 2015. After three rounds of bilateral meetings and exchang e of service 
offers, both sides had conclude d negotiations  in June 2017 and had officially signed the agreement 
on 27 October 2017. The implementation of the agreement had started on 1 January 2018.  
1.14.   Since t he implementation of the Agreement , bilateral trade had remained resilient, with  the 
Economic and Technical Cooperation Work Progr amme  strengthening the  exchanges between the 
government bureaux of both sides that the Parties had  never had before, and which they believe d 
would  open a new page to the bilateral relationship in the future . 
1.15.   To conclude, the A greement  offered  a high level of openness, display ed the long-standing 
relationship between the two sides, create d an environment with greater certainty and paved the 
way for more possibilities of cooperation that would  be mutually advantageous for development in 
the future.  He looked forward to a fruitful discussion and would  listen carefully to any comments 
made by Member s.  
1.16.   The representative of China  thanked the Parties for their detailed presentations of the 
Agreement. On the policy of one country, two systems, Hong Kong, China and  Macao, China were 
two separate customs territories that had signed the Agreement in line with WTO agreements. The 
Parties had world -renowned free -trade ports. The Agreement would contribute to further liberalizing 
their markets and provide preferential tr eatment. China believed that the Agreement would greatly 
enhance the Parties' economic cooperation and looked forward to discussion s with Members.  WT/REG390/M/1  
 
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  1.17.   The representative of the United States  thanked the Parties for their presentations and 
acknowledged the best  practice performance of notifications of the two Parties. Across all of their 
agreements they had done an excellent job of notification. With respect to the Agreement, his 
delegation appreciated the full tariff coverage of trade in goods. Although this wa s not surprising, it 
was an important commitment. He drew attention to the considerably less ambitious outcome on 
services and asked the Parties to consider being more ambitious and go beyond the limited 
improvements in the GATS coverage. He said that despite using a positive list approach for listing 
services commitments, which he thought limited ambition, he was encouraged that Hong Kong, 
China had improv ed coverage in distribution services and in a number of business services including 
computer  and related services. These were important. For Macao, China, the United States was 
encouraged by its expanded sectoral coverage over its GATS commitments, particularly for 
telecommunications services and by the addition of  the Reference Paper for basic 
telecommunications.  
1.18.   He also noted the inclusion of specific domestic regulations for service suppliers. It was not 
the only agreement under discussion that day that had some elements of domestic regulation . Given 
the importance of that issue in the WTO and  the effort to develop WTO rules the Committee might 
want to consider how these provisions might be captured in factual presentation s. He asked the 
Parties to clarify if the scope of the domestic regulation provisions were limited to the positive list of 
commitments made under the Agreement or if the scope was broader. In conclusion, given the 
growth and importance of e -commerce and trade in the region, and the fact that a number of new 
FTAs around the world were covering such topics, he saw  the lack of a s eparate chapter in th at area 
as a shortcoming of the Agreement . He encouraged the Parties to look at digital trade issues in their 
future agreements.  
1.19.   The representative of the European Union  thanked the Parties for their interesting 
presentations and the S ecretariat for the comprehensive analysis of the Agreement. Her delegation 
had paid particular attention to the services part. The EU had submitted an advance question to the 
Parties to which it had received a response. It had no follow up questions.  
1.20.   The r epresentative of Hong Kong, China  thanked the United States and the European Union 
for their comments. With regard to domestic regulation, the commitments made were limited to the 
sectors scheduled using the  positive list approach. Regarding e -commerce and  digital trade, the 
Parties had taken note  of the comments  and d iscussions on this issue would continue.  
1.21.   The Chairman  said that the  consideration of the Goods and Services Aspects of the Closer 
Economic Partnership Arrangement between Hong Kong, China and Macao, China, ha d allowed the 
Committee  to clarify a number of questions and it could now  conclude oral discussion of th e RTA in 
accordance with paragraph 11 of the Transparency Mechanism. Any delegations wish ing to ask 
follow -up questions were invited to forward submissions in writing to the Secretariat by 8  April 2019  
and Parties were asked to submit replies in writing by no later than 22 April 2019. In accordance 
with paragraph  13 of the Transparency Mechanism all written submissions, as well as minutes of 
this meeting would  be circulated promptly, in all WTO  official languages, and would  be made 
available on the WTO website.  
1.22.   The Committee took note  of the comments made.  
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