WT/REG390/1/Rev.1  
2 April 2019  
(19-2087) Page: 1/24 
Committee on Regional Trade Agreements    
 
FACTUAL PRESENTATION  
CLOSER ECONOMIC PART NERSHIP ARRANGEMENT  BETWEEN HONG KONG, CHINA  AND 
MACAO,  CHINA  
(GOODS AND SERVICES ) 
Report by the Secretariat  
Revision  
This report, prepared for the consideration of the Closer Economic Partnership 
Arrangement  between Hong Kong, China  and Macao, China , has been drawn up by the 
WTO Secretariat on its own responsibility and in full consultation with the Parties. The 
factual presentation reproduces as closely as possible the terminology used in the 
Agreement and in the comments provided and does not imply official endorsement or 
acceptance by the Secretariat of such terminology. The report has been drawn up in 
accordance with the rules and procedures contained in the Decision for a Transparency 
Mechanism for Regional Trade Agreements (WT/L/671) and thus does not imply any 
value judgement by the Secretariat regarding the contents of the Agreement.  
Any technical questions arising  from this report may be addressed to Jean-Daniel Rey  
(tel: +41 22 739 52 64 ). Any statistical questions arising from this report may be 
addressed to Rowena Cabos (tel: +41 22 739 5185) . 
 
 
  WT/REG3 90/1/Rev.1  
 
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TABLE OF CONTENTS  
Page 
1   TRADE ENVIRONMEN T ................................ ................................ ................................ . 4 
1.1   Merchandise trade  ................................ ................................ ................................ ....... 4 
1.2   Trade in services and investment  ................................ ................................ ..................  6 
2   CHARACTERISTIC E LEMENTS OF THE AGREE MENT  ................................ ....................  10 
2.1   Background Information  ................................ ................................ .............................. 10 
3   PROVISIONS ON TR ADE IN GOODS  ................................ ................................ ...........  11 
3.1   Import duties and charges, and quantitative restrictions ................................ .................. 11 
3.1.1    General provisions  ................................ ................................ ................................ ...11 
3.1.2    Liberalization of trade and tariff lines  ................................ ................................ ......... 11 
3.1.3    Liberalization schedule  ................................ ................................ ............................. 11 
3.1.4    Tariff rate quotas  ................................ ................................ ................................ .....12 
3.2   Rules of origin  ................................ ................................ ................................ ............ 12 
3.3   Export duties and charges, and quantitative restrictions  ................................ .................. 12 
3.4   Regulatory provisions on trade in goods  ................................ ................................ ........ 12 
3.4.1    Standards  ................................ ................................ ................................ ............... 12 
3.4.1.1    Sanitary and phytosanitary measures  ................................ ................................ ......12 
3.4.1.2    Technical barriers to trade  ................................ ................................ ..................... 12 
3.4.2    Safeguard mechanism  ................................ ................................ .............................. 13 
3.4.3    Antidumping and countervailing measures  ................................ ................................ ..13 
3.4.4    Subsidies and State -aid ................................ ................................ ............................ 13 
3.4.5    Customs -related procedures ................................ ................................ ...................... 13 
4   PROVISIONS ON TR ADE IN SERVICES AND INVESTMENT  ................................ .........  14 
4.1   Scope and definitions  ................................ ................................ ................................ ..14 
4.2   Denial of benefits  ................................ ................................ ................................ .......14 
4.3   General provisions on trade in services  ................................ ................................ ......... 14 
4.3.1    Market  access  ................................ ................................ ................................ ......... 14 
4.3.2    National treatment and MFN  ................................ ................................ ...................... 14 
4.3.3    Commercial (local) presence  ................................ ................................ ..................... 14 
4.3.4    Performance Requirements  ................................ ................................ ....................... 14 
4.3.5    Senior Managers and Boards of Directors  ................................ ................................ ....15 
4.3.6    Movement of natural persons  ................................ ................................ .................... 15 
4.4   Liberalization commitments  ................................ ................................ ......................... 15 
4.4.1    Hong Kong, China  ................................ ................................ ................................ ....15 
4.4.1.1    MFN and horizontal commitments  ................................ ................................ ........... 15 
4.4.1.2    Sector specific commitments  ................................ ................................ .................. 16 
4.4.2    Macao, China  ................................ ................................ ................................ .......... 19 
4.4.2.1    MFN and horizontal commitments  ................................ ................................ ........... 19 
4.4.2.2    Sector specific commitments  ................................ ................................ .................. 19 WT/REG3 90/1/Rev.1  
 
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4.5   Regulatory provisions  ................................ ................................ ................................ ..22 
4.5.1    Domestic regulation  ................................ ................................ ................................ .22 
4.5.2    Recognition  ................................ ................................ ................................ ............. 22 
4.5.3    Subsidies  ................................ ................................ ................................ ................ 22 
4.5.4    Safeguards  ................................ ................................ ................................ ............. 22 
4.5.5    Other  ................................ ................................ ................................ ..................... 22 
4.5.5.1    Investment  ................................ ................................ ................................ .......... 22 
4.6   Sector specific provisions on trade in services  ................................ ................................ 22 
4.6.1    Financial services  ................................ ................................ ................................ .....22 
5   GENERAL PROVISIO NS OF THE AGREEMENT  ................................ .............................  23 
5.1   Transparency  ................................ ................................ ................................ ............. 23 
5.2   Current payments and capital movements  ................................ ................................ .....23 
5.3   Exceptions  ................................ ................................ ................................ ................. 23 
5.4   Accession and Withdrawal ................................ ................................ ............................ 23 
5.5   Institutional framework  ................................ ................................ ............................... 23 
5.6   Dispute settlement  ................................ ................................ ................................ .....23 
5.7   Relationship with other agreements concluded by the Parties  ................................ ........... 23 
5.8   Government procurement  ................................ ................................ ............................ 24 
5.9   Intellectual property rights  ................................ ................................ .......................... 24 
5.10   Other  ................................ ................................ ................................ ...................... 24 
5.10.1    Economic and technical cooperation  ................................ ................................ ......... 24 
 
  WT/REG3 90/1/Rev.1  
 
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Key Facts  
 
Parties to the Agreement:  Hong Kong, China and 
Macao,  China  
 
Date of Signature:    27 October 2017 
 
Date of Entry into Force:  27 October 2017 
 
Date of Notification:   18 December 2017  
 
Full implementation:   1 January 2018  
 
 
1  TRADE ENVIRONMENT1 
1.1.  The Closer Economic Partnership Arrangement between Hong Kong, China and Macao, China  
(hereinafter referred to as "the Agreement") is one of Hong Kong, China 's five, and Macao, China's  
two RTAs notified to the WTO .2  
1.2.  In 2016, Hong Kong, China 's GDP was estimated at US$ 321 billion, while that of Macao, China 
was US$ 44 billion. Averaged over the period 2014 -2016, the Parties' trade (goods and services) to 
GDP ratio3 was 197.6  for Hong Kong, China  and 57.3 for Macao, China . 
1.1  Merchandise trade  
1.3.  In 2016, Hong Kong, China 's merchandise exports amounted to US$ 517 billion ( 3.24% of 
global exports and 5th largest exporter to the world) and imports amounted to US$ 547 billion ( 3.37% 
of global imports and 5th largest importer from the world). In the same year, Macao, China's  
merchandise exports amounted to US$ 1.2 billion ( 0.01% of g lobal exports and 118th largest exporter 
to the world) and imports amounted to US$ 8.9 billion ( 0.06% of global imports and 75th largest 
importer from the world). For both Parties manufactured products represent the main commodity 
group traded ( 87.8% and 85 .2% respectively of Hong Kong, China 's exports and imports; and 54.1% 
and 73.1 % respectively of the Macao, China's  exports and imports).  
1.4.  Based on 2016 trade data4, Macao, China was  Hong Kong, China 's 21st largest source for 
imports5 (representing 0.16% of Hong Kong, China 's total imports) and 13th largest destination for 
exports6 (representing 1.03% of Hong Kong, China 's total exports). Hong Kong, China  was Macao, 
China's third  largest source for imports7 and largest destination for exports8 (representing 8.9% and 
31.6% of Macao, China's  total imports and exports).  
1.5.  Chart 1.1 summarizes the trends in global and bilateral trade of the Parties. Both Parties  
experienced a trade deficit with the world during the period considered (2000 -2016), with continued 
growt h in trade , except during the financial crisis,  until 2013 when the value of both imports and 
                                                
1 Source: WTO Trade Profiles (2016 data); situation in April 2018. For the calculation of the GDP-Trade 
ratio, the period covers 2014 -2016 (annual average).  
2 RTAs in goods and services counted as one and only agreements in force, notified to the WTO.  
3 The trade to GDP ratio indicates the importance of trade in GDP. The value of trade corresponds to the 
total of trade in goods and services (exports plus imports), on a BOP basis.  
4 Source: UNSD Comtrade  database .  
5 The five top sources of imports for Hong Kong, China were: China (45.9%); other Asian economies 
(6.9%); Singapore (6.5%); the EU(28) (6.4%); and Japan (6.1%). (Source: UNSD Comtrade).  
6 The five top destinations for exports from Hong Kong, China were: Chi na (55.3%); the EU(28) (9.0%); 
the US (8.1%); India (3%); and Japan (2.9%). (Source: UNSD Comtrade).  
7 The five top sources of imports for Macao, China  were: China ( 35.1%); the EU(28)  (24.4%); Hong Kong, 
China  (8.9%); Switzerland  (7.9%); and Japan (6.3%). (Source: UNSD Comtrade).  
8 The five top destinations for exports from Macao, China were: Hong Kong, China (31.6%); China (6.8%); 
Japan (1.9%); other Asian economies (0.3%); and Singapore (0.2%). (Source: UNSD Comtrade).  WT/REG3 90/1/Rev.1  
 
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exports  for Hong Kong, China started to decline . In bilateral trade UNSD Comtrade statistics show a  
constant  positive balance in favour of Hong Kong , China, throu ghout the period . 
Chart 1.1 Hong Kong, China – Macao, China: Merchandise trade bilaterally and with 
world, 2000 -2016  
 
Source:  UNSD Comtrade database  and Macao authorities (Statistics and Census Service, DSEC) . 
 
1.6.  The commodity structure of trade between Hong Kong, China  and Macao, China , as well as 
both Parties' global trade in the period 2014 -2016, are shown in Chart 1.2 on the basis of 
Harmonized System (HS) sections . Watches and other equipment, pearls, and m achinery  accounted 
for more than half of the Hong Kong, China's imports from Macao , China  (respectively corresponding 
to 26%, 20.5%, and 13.6% of Hong Kong , China's  imports from Macao , China ). These three 
categories of commodities also corresponded to, res pectively, 4.4%, 14%, and 58.1 % of Hong Kong, 
China's  global imports, and to, respectively, 11.6%, 6.6%, and 22.3% of Macao , China 's exports to 
the world. The three commodities most imported by Macao , China  from Hong Kong, China were 
pearls, prepared foodstuffs , and chemicals , representing respectively 70.9%, 9.2%, and 6.0% of 
Macao , China 's imports from its partner. The same commodities corresponded to, respectively, 
6.6%, 8.7%, and 6.1% of Macao, China's  global exports, and to, respectively, 15.5%, 0.7%, and 
1.4% of Hong Kong, China 's total export  to the world.  
01234567
02468101214
2000 2002 2004 2006 2008 2010 2012 2014 2016B. Macao, China 2000 -2016
(US$ billions)
Imports from Hong Kong, China (Right Axis)
Exports to Hong Kong, China (Right Axis)
Total Imports
Total Exports
01234567
0100200300400500600700
2000 2002 2004 2006 2008 2010 2012 2014 2016A. Hong Kong, China 2000 -2016 
(US$ billions)
Imports from Macao, China (Right
Axis)
Exports to Macao, China (Right Axis)
Total Imports
Total ExportsWT/REG3 90/1/Rev.1  
 
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Chart 1.2 Hong Kong, China – Macao, China: product composition of merchandise trade, 
by HS Section , annual average  (2014 -2016)  
 
Source:  UNSD Comtrade database  and Macao authorities (Statistics and Census Service, DSEC) . 
 
1.2  Trade in services and investment  
1.7.  In 2016, Hong Kong, China 's shares of global  commercial services exports and imports we re 
2.05% and 1.58% respectively, while Macao, China's  corresponding shares were 0.67% of global 
exports and 0.08% of global imports. With total commercial services exports of US$ 98 billion, and 
imports of US$ 74 billion, Hong Kong, China  was the world' s 8th largest exporter and 11th largest 
importer of commercia l services, while Macao, China was  the 21st largest exporter (US$ 32 billion) 
and 57th largest importer (US$ 3.8 billion).9 
1.8.  Chart  1.3 and Chart 1.4 below show global trade in commercial services for , respectively,  Hong 
Kong, China  and Macao, China (based on the period 2005-2016 in both cases ). Both are net 
exporters of commercial services. Hong Kong, China's main exports are transport, travel, financial 
and other business services, while Macao , China mainly exports travel services. Key imports inclu de 
                                                
9 Source: WTO Trade Profiles (2016 d ata); situation in April 2018.  
7196329Macao, China's imports from Hong 
Kong, China(%)
19
11
11
9 98554444223Macao, China's Global Imports(%)
22
14
12
98766542222Macao, China's Global Exports(%)6116553228Hong Kong, China's Global Exports 
(%)
26
20
14108543335Hong Kong, China's imports from 
Macao, China (%) 
58
14442222228Hong Kong, China's Global Imports 
(%)
Total: US$ 878 million Total: US$569 billion
Total: US$ 10 billion Total: US$ 1.3 billionTotal:  US$ 517 billion
Total:  US$ 953 million
Prepared 
foodsVegetablesLive animals
PlasticsChemicalsMinerals
FootwearTextilesRaw hides 
and skins
Base metalsPrecious stonesArticles of stone, 
plaster, cement
OpticalVehiclesMachinery
OtherMiscellaneousWT/REG3 90/1/Rev.1  
 
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travel, transport and manufacturing services for Hong Kong, China and travel and other business 
services for Macao,  China.  
1.9.  Chart 1.5 below depicts the bilateral trade in commercial services between the two Parties, 
based on Hong Kong, China's data  (2014 -2016) , showing an increasing, though modest, deficit for 
Hong Kong, China. Travel services , complemented by other business services represent the largest 
services sectors traded between the two Parties.  
Chart 1.3 Hong Kong, China: Global trade in commercial services, 2005 -2016  
 
Note:  No export data for m anufacturing services on physical inputs owned by oth ers (2005 -2013); Trade 
in commercial services from 2014 -2016 exclude financial intermediation services in directly measur ed 
(FISIM); Excluding government goods and services . 
 Based on BMP6; Exchange rates to convert HKD to US$ for 2014  to 2016 are: 2014 (7.75); 2015 
(7.75); and 2016 (7.76) . 
Source:  WTO Statistics D atabase (2005 -2013) and Hong Kong, China authorities (2014 -2016) . 
Manufacturing services
Maintenance & repair services
Transport 
Travel Insurance and pension 
services
Financial services
Charges for the use of 
intellectual property Telecommunication, 
computer and information 
services
Other business servicesConstruction 
Personal, cultural and 
recreational services020406080100120
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016Hong Kong, China imports from world
2005 -2016
(US$ Billion)
020406080100120
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016Hong Kong, China exports to world
2005 -2016
(US$ Billion)WT/REG3 90/1/Rev.1  
 
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Chart 1.4 Macao, China: Global trade in commercial services, 2005 -2016  
 
Note:  No export data for Construction (2005 -2016), Charges for the use of intellectu al property, n.i.e. 
(2005 -2016); No import data for Construction (2005 -2009; 2014 -2016); No trade data for Personal, 
cultural, and re creational services (2005 -2014); Exchange rates to convert MOP to US$ for 2014 to 
2016 are: 2014 (7.99); 2015 (7.98); 2016 (8.00).  
Source:  WTO Statis tics Database (2005 -2013) and Macao, China authorities (2014 -2016) based on BMP 6. 
Chart 1.5 Hong Kong, China: Trade with Macao, China (2014 -2016)  
 
Note:  Figures not released due to some reasons (e.g. preserving confidentiality of information relating to 
individual establishments) on Maintenance and repair services; and Construction (2014 -2016) ; 
 Trade in commercial services from 2014 -2016 exclude Financial intermediation servi ces indirectly 
measured (F ISIM); E xcludin g government goods and services; Based on BMP6; E xchange rates to 
convert HKD to US$ for 2014 to 2016 are: 2014 (7.75); 2015 (7.75); 2016 (7.76).  
Source:  Hong Kong, China authorities.  
Manufacturing services on physical 
inputs owned by others
Maintenance & repair services, n.i.e.
Transport services
Travel servicesInsurance and pension 
services
Financial services
Charges for the use of 
intellectual property n.i.e.Telecom, computer and 
information services
Other business servicesConstruction services
Personal, cultural and 
recreational services012345678910
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016A. Macao, China imports from world
2005 -2016
(US$ Billion)
05101520253035404550
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016B. Macao, China exports to world
2005 -2016
(US$ Billion)
Manufacturing services
Maintenance & repair services
Transport 
Travel Insurance and pension 
services
Financial services
Charges for the use of 
intellectual property Telecommunication, 
computer and information 
services
Other business servicesConstruction 
Personal, cultural and 
recreational services01002003004005006007008009001,000
2014 2015 2016Hong Kong, China imports from Macao, 
China
2014 -2016
(US$ Million)
01002003004005006007008009001,000
2014 2015 2016Hong Kong, China exports to Macao, China
2014 -2016
(US$ Million)WT/REG3 90/1/Rev.1  
 
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1.10.   Chart 1.6 shows Hong Kong, China's position of direct inv estment at year end as well as direct 
investment flows with Macao, China and the world, while Chart 1.7 depicts Macao, China's FDI stock 
and flow with Hong Kong, China and wit h the world. For much of the period Hong Kong, China has 
been a net recipient of FDI stock although outward FDI stock has also grown steadily. Hong Kong, 
China also maintains significant stocks in Macao, China, which is also a net recipient of FDI globally.  
Chart 1.6 Hong Kong, China: Posi tion of Direct investment at year end and Direct 
investment flows with Macao, China and world  
 
Note:  Exchange rates to convert HKD to US$ for 2014 to 2016 are: 2014 (7.75); 2015 (7.75); 2016 
(7.76); Negative inflow/ outflow does not necessarily relate to  equity withdrawal. It may be the 
result of repayment of loans owed to/ by non -resident affiliates.  
Source:  UNCTAD  (2000 -2013)  and Hong Kong, China authorities (2014 -2016).  
 
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2014 2015 2016Position of Direct investment at year end  
with Macao, China
(US$ Million ) 
Outward
Inward
-1,500-1,000-50005001,000
2014 2015 2016Direct investment flows with Macao, China
(US$ Million) 
Outward
Inward
02004006008001,0001,2001,4001,6001,800
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016Position of Direct investment at year end 
with world
(US$ Billion )
Outward Inward
020406080100120140160180200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016Direct investment flows with world
(US$ Billion ) 
Outward InwardWT/REG3 90/1/Rev.1  
 
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Chart 1.7 Macao, China:  FDI stock and flow with world and Hong K ong, China  
 
Note:  No outward FDI flo w and stock with world (2000); Based on BPM6; Exchange rates to convert MOP 
to US$ for 2014 -2016 are: 2014 (7.99); 2015 (7.98); 2016 (8.00).  
Source:  UNCTAD (2000 -2013) and Macao, China authorities (2014 -2016).  
 
2  CHARACTERISTIC ELEME NTS OF THE AGREEMENT  
2.1  Background Information  
2.1.  The Agreement  was signed on 27 October 2017  and notified to the WTO on 18 December 2017  
under Article  XXIV:7(a) of GATT 1994 and Article V:7(a) of the GATS (see document 
WT/REG390/N/1 and S/C/ N/898 ).  
2.2.  Article 34 governs the entry into force of the Agreement . The Agreement entered into force on 
27 October 2017, when it was signed by the representatives of the two Parties. The commitments 
of the Parties with respect to the liberalization of trade  in goods and services were fully implemented 
on 1 January 2018.   
2.3.  The text of the Agreement10, together with its annexes, is available on the Parties' official 
websites:  
Hong Kong, China : http://www.tid.gov.hk/english/ita/fta/hkmacao/text_agreement.html  
 
Macao, China : https://www.economia.gov.mo/en_US/web/public/pg_rc_hmcepa?_refresh=true  
 
 
                                                
10 The official signed version of the Agreement is in Chinese.  
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2014 2015 2016FDI stock with Hong Kong, China
(US$ Million ) 
Outward
Inward
02004006008001,0001,200
2014 2015 2016FDI flow with Hong Kong, China
(US$ Million) 
Outward
Inward
05101520253035
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016FDI stock with world
(US$ Billion )
Outward Inward
-20246810
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016FDI flow with world
(US$ Billion ) 
Outward InwardWT/REG3 90/1/Rev.1  
 
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2.4.  The Agreement is composed of 12 Chapters. Two Annexes, containing  the Parties' respective 
Specific Commitments on Liberalization of Trade in Services also form part of the Agreement.  The 
Agreement is also complemented by an Economic and Technical Cooperati on Work Programme 
(pursuant to Article 28).  Box 2.1 below summarizes the structure of the Agreement.  
Box 2.1 Structure of the Agreement  
Titles, 
Chapters  Title/description  
Preamble   
Chapter 1  Initial provisions  
Chapter 2  Definitions  
Chapter 3  Trade in goods  
Chapter 4  Trade remedies  
Chapter 5  Customs procedures and trade facilitation  
Chapter 6  Technical barriers to trade  
Chapter 7  Sanitary and phytosanitary measures  
Chapter 8  Trade in services  
Chapter 9  Investment  
Chapter 10  Intellectual property  
Chapter 11  Economic and technical cooperation  
Chapter 12  Other provisions  
  
Annex 1  Hong Kong, China's specific Commitments on Liberaliz ation of Trade in Services for 
Macao , China  
Annex 2  Macao, China's specific Commitments on Liberalization of Trade in Services for Hong 
Kong, China  
 
Economic and Technical Cooperation Work Programme  
Source:  WTO Secretariat based on the Agreement.  
2.5.  Article 1 sets the objectives of the Parties to achieve liberalization of trade between them, 
strengthen trade and investment cooperation between the two sides and promote joint development 
of the two sides .  
3  PROVISIONS ON TRADE IN GOODS  
3.1.  Chapter 3  of the Agreement specifically cover s trade in goods, while other relevant Chapters 
contain horizontal provisions that are a lso applicable to trade in goods.  
3.1  Import duties and charges, and quantitative restrictions  
3.1.1   General provisions  
3.2.  The Parties agree to accord national treatment to each other's ' goods in accordance with 
Article  III of GATT 1994 and its interpretative notes, which are incorporated into and made part of 
the Agreement  (Article 4 ).  
3.3.  Neither Party shall apply non -tariff measures  that are  inconsistent with the WTO rules on goods 
imported from and originat ing in  the other Party (paragraph 1 of Article 6).  
3.1.2   Liberaliza tion of trade and tariff lines  
3.4.  Each Party commits to apply zero tariffs to all imported goods originat ing in  the other Party 
(Article 5). According to paragraph 2 of Article 34, the tariff liberalization programme was 
implemented  from 1 January 2018.  
3.1.3   Liberalization schedule  
3.5.  In 2017, and based on the HS 2017 nomenclature, Macao, China's tariff was composed of 
6,641 tariff lines (at the eight -digit level) and Hong Kong, China's tariff consisted in 7,551 tariff lines 
(at the eight -digit level). In both cases,  all tariff lines were all duty free on an MFN basis.  WT/REG3 90/1/Rev.1  
 
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3.6.  Consequently, and a s all products originating in a Party shall be granted duty free access in 
the market of the other Party, no liberalization schedule is attached to the Agreement.  Moreover, 
both Parti es already gran ted MFN duty free access to all products prior to the entry into force of the 
Agreement, thus providing no additional preferential treatment as a result of the implementation of 
the Agreement.  
3.1.4   Tariff rate quotas  
3.7.  The Parties agree not to appl y tariff rate quota to goods imported and originated from each 
other (paragraph 2 of Article 6).  
3.2  Rules of origin  
3.8.  The Agreement does not contain any specific preferential rule s of origin. Article 7 simply states 
that the rules of origin specified by one Par ty shall be applied to the goods imported by the other 
Party (paragraph 1 of Article 7).  
3.9.  Moreover, one Party may seek assistance from the other Party to verify whether the goods 
imported from that Party comply with the applicable rules of origin. If the v erifications conducted by 
one Party confirms that a good does not comply with the requirements for preferential treatment 
under the Agreement, that Party shall notify the other and consultations shall take place to address 
the matter (paragraph 2 of Articl e 7). 
3.3  Export duties and charges, and quantitative restrictions  
3.10.   The Agreement is silent on export duties and charges and does not address quantitative 
restrictions. It is however understood that a Party may not apply export duties and charges as well 
as qua ntitative restrictions in connection w ith trade with the other Party.  
3.4  Regulatory provisions on trade in goods  
3.11.   The Agreement contains regulatory provisions on trade remedies (Chapter 4); customs 
procedures and trade facilitation (Chapter 5); technical barri ers to trade (Chapter 6); and sanitary 
and phytosanitary measures (Chapter 7).   
3.4.1   Standards  
3.12.   Chapters 6 and 7  cover technical barriers to trade (TBT) and sanitary and phytosanitary 
measures (SPS), respectively.  
3.4.1.1   Sanitary and phytosanitary measures  
3.13.   The rules go verning SPS measures  are contained in Chapter 7 . Under Article 14, the Parties 
reiterate their observance of the WTO Agreement on the Application of Sanitary and Phytosanitary 
Measures (SPS Agreement) . 
3.14.   The Parties commit to strengthen communication and cooperation in SPS areas, including with 
respect of commodity inspection and quarantine, food safety, health and quarantine of people, and 
certification, accreditation and standardisation. In the Economic and Technical Cooperation Work 
Programme established pursuant to Article 28, the Parties agree to notify each other immediately in 
case of epidemic outbreaks and with respect to food safety. They commit to step up academic 
exchange and joint research on he alth and quarantine issues and to enhance cooperation in areas 
such as investigation and prevention of tropical infectious diseases and live vectors, surveillance and 
control of special articles and radioactive articles, transportation of biological pathog enic factors and 
related inspection, treatment and control measures.  
3.4.1.2   Technical barriers to trade  
3.15.   The rules governing TBT are contained in Chapter 6 . The Parties reiterate their observance of 
the WTO Agreement on Technical Barriers to Trade (Article 12).  WT/REG3 90/1/Rev.1  
 
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3.16.   In the Economic and Technical Cooperation Work Programme established pursuant to 
Article  28, the Parties also agree to make use of the existing cooperation channels to promote 
cooperation in the areas of technical regulations, standards and conformity asse ssment procedures 
with a view to enhancing mutual understanding of the ir regulatory systems, improving technical 
competence and facilitating the launch of capacity building activities. Cooperation channels of the 
Parties' relevant departments will be used to promote cooperation through reciprocal visits, 
discussions and other mode of communication. The areas of cooperation identified by the Parties 
include consumer safety through enhance d information flow s and exchanges on product safety 
(particularly with respect to electrical and mechanical products); and training of inspection and 
supervisory officers.  
3.4.2   Safeguard mechanism  
3.17.   Article 10 foresees that if the implementation of the Agreement causes a "sharp increase" in 
the import of a product originating from a Party which has caused or threatened to cause "serious 
injury" to the other Party's domestic industry that produces like or directly competitive products, the 
affected Party may temporarily suspend the concessions on the import of the concerned product 
from the other Party. Such an action shall only take place after having given written notice. 
Moreover, upon request by a Party, consultations11 shall promptly commence in order to reach an 
agreement.  
3.18.   The Agreement does not foresee any other safeguard mechan ism. 
3.4.3   Antidumping and countervailing measures  
3.19.   Under Article 8, neither Party shall apply antidumping measures to goods imported and 
originated from the other Party.  This means that, when applied to their bilateral trade relations, the 
Parties renounce their rights under Article VI of the GATT 1994 and the WTO Agreement on 
Implementation of Article VI of the GATT 1994.  
3.20.   With respect to subsidies and countervailing meas ures, the two Parties reaffirm the disciplines 
contained in the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement). They 
also undertake not to apply countervailing measures to goods imported and originated from each 
other (Article 9).  
3.4.4   Subsidies and State -aid 
3.21.   Besides the reaffirmation of the disciplines contained in the SCM Agreement, the Agreement 
does not contain any other subsidies and/or State-aid specific provision.  
3.4.5   Customs -related procedures  
3.22.   The rules governing customs and trade fac ilitation are contained in Chapter 5. The Parties 
commit to strengthen communication and cooperation in customs clearance facilitation.  
3.23.   In the Economic and Technical Cooperation Work Programme established pursuant to 
Article  28, the Parties agree to make use of the existing cooperation channels to promote cooperation 
in the area through reciprocal visits, discussions and other mode of communication. They identify 
several areas for strengthened cooperation. This is in particular the case in relation to: (i)  the 
establishment of a reciprocal notification system to report policies, regulations and procedures; (ii) 
the conduct of studies and exchanges on the differences between the Parties' respective customs 
clearance systems; (iii) the exploration of the expa nsion of the scope for further cooperation in 
strengthening control and enhancing efficiency of customs clearance in areas such as sea and land 
transportation, intermodal operation and logistics; (iv) the possible establishment of a crisis 
management mecha nism at control points; (v) the exploration of cooperation in other areas12; and 
(vi) the establishment of a regular liaison mechanism.   
                                                
11 As foreseen under Article 30 (institutional arrangements).  
12 Cooperation may cover the use of automated systems; temporary admission of goods; express 
consignme nts; release of goods; risk management; review and appeal; mutual recognition of examination WT/REG3 90/1/Rev.1  
 
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4  PROVISIONS ON TRADE IN SERVICES  AND INVESTMENT  
4.1.  Chapter 8 contains disciplines on trade in services , while Chapter 9 covers investment.  
4.1  Scope and definitions  
4.2.  Chapter 8 applies to trade in services provided through any of the four modes of supply 
identified in paragraph 2 of Articles I of the GATS. Chapter 8 however does not apply to government 
procureme nt or subsidies or donations accorded by one Party, including government -supported 
loans, guarantee s and insurance.   
4.3.  Further to the national treatment commitments provided for under the Agreement, the Parties 
commit to liberalization of trade in services a s formulated in Annexes 1 and 2 of the Agreement, 
which contain the Parties' respective Schedules of Specific Commitments.  
4.2  Denial of benefits  
4.4.  The Agreement does not contain any specific provision on denial of benefits.  
4.3  General provisions on trade in servi ces 
4.5.  Chapter 8 ( trade in services ) contain s general provisions that are summarized below which 
should be also rea d in conjunction with Annexes 1 and 2  to the Agreement, as set out in 
paragraph  4.4.  
4.3.1   Market access  
4.6.  The Agreement does not contain any specific provision on Market Access (MA). However, the 
Parties' Schedules of Specific Commitments refer to MA -related conditions and/or limitations 
applicable to certain sectors and/or subsectors.  
4.3.2   National treatment and MFN  
4.7.  Under Article  17 (trade in services), each Party shall grant national treatment13 to services and 
service suppliers of the other Party.  
4.8.  The Agreement does not contain specific disciplines on MFN  treatment.  
4.3.3   Commercial  (local)  presence  
4.9.  The Agreement does not contain any  specific provision on Local Presence (LP). However, the 
Parties' Schedules of Specific Commitments refer to LP -related conditions and/or limitations 
applicable to certain sectors and/or subsectors.  
4.3.4   Performance R equirements  
4.10.   The Agreement does not contain any specific provision on Performance Requirements (PR). 
However, the Parties' Schedules of Specific Commitments refer to PR -related conditions and/or 
limitations applicable to certain sectors and/or subsectors.  
                                                
results; speedy customs clearance; mutual recognition of "authorised economic operators"; joint prohibition of 
drug trafficking; enforcement of laws protecting int ellectual property and related personnel training; and/or 
human resources development and professional training.  
13 National treatment commitment may be granted through either formally identical treatment or 
through formally different treatment as long as i t does not modify the conditions of competition in favour of 
services or service suppliers of one side compared to like services or service suppliers of the other side.  WT/REG3 90/1/Rev.1  
 
- 15 - 
 
 
4.3.5    Senior Managers and Boards of Directors  
4.11.   The Agreement does not contain any specific provision on Senior Managers and Boards of 
Directors (SMBD). However, the Parties' Schedules of Specific Commitments refer to SMBD -related 
conditions and/or limitations applicable to certain sectors and/or subsecto rs.  
4.3.6   Movement of natural persons  
4.12.   The Agreement does not contain any specific provision on the movement of natural persons.  
However, Annexes 1 and 2 contain commitments made by each Party with respect to natural persons 
from the other Party involved in providing services under mode 4 (temporary movement of persons). 
The Parties ' commitments cover business visitors, and intra-corporate transferees14, while Macao, 
China also includes commitments on  personnel directly engaged in establishment . In the case of  
Hong Kong, China, the commitments under the Agreement build on those contained in the 
attachment  (on the presence of natural persons) to its GATS Schedule o f Specific Commitments. In 
the case of Macao, China, the commitments under the Agreement expand th e partial commitments  
in its GATS Schedule of Specific Commitments with respect to the transfer of CEO s, alternate CEO s, 
directors, specialists and other staff who are not available in the local labour market.   
4.4  Liberalization commitments  
4.13.    The sections below  compare the Parties' liberalization commitments under the Agreement 
with their GATS commitments. Each Party's GATS schedule is compared to Annexes 1 (Hong Kong, 
China) or 2 (Macao, China), as appropriate.  Tables 4.1 and 4.2 summarize specific commitments 
under the Agreement, by sectors and sub -sectors and compare them with the GATS commitments. 
Improvements over existing GATS commitments include a reduction in market access and/or 
national treatment limitations, a relaxation of the form of establishment un der mode  3, and/or 
additional commitments and/or improved sectoral coverage. Horizontal limitations in the GATS 
Schedule of Specific Commitments and reservations covering all sectors are not included in the 
tables but are addressed separately. Mode 4 commi tments and limitations are, to a large extent, 
also excluded from the tables. The following sections are to be read in conjunction with the Parties' 
Schedule of Specific Commitments .  
4.14.   The Parties' respective specific commitments on trade in services are co ntained in Annexes  1 
and 2 of the Agreement. The ir Schedules of Specific Commitments take the form of a positive listing, 
as under the GATS. At the request of either Party, the two sides may, through consultations, further 
raise the level of liberalization  of trade in services between them and incorporate such changes in 
the Annexes (Article 18).  
4.4.1   Hong Kong, China  
4.4.1.1   MFN and horizontal commitments  
4.15.   In its GATS schedule, Hong Kong, China  has made partial commitments in a number of 
services sectors; it made no commitments in education services, environmental services , health 
related and social services . Under the Agreement, improvements are made in terms of sectoral 
coverage, with environmental services and some health related and social services part ially covered. 
Moreover, additional sub -sectors are partially bound in sectors for which it has GATS commitments . 
4.16.   No MFN exemptions are scheduled under the GATS . The Agreement does not contain any  MFN 
treatment  provision.   
4.17.   Hong Kong, China  did not register  any horizontal limitations  under the GATS , though some 
conditional and limited mode 4  commitments were made in a number of scheduled sectors .15 Under 
                                                
14 In the case of Hong Kong, China, "intra -corporate transferees" means senior managers or specialists 
who are employees of a service supplier of Macao, China with a commercial presence in Hong Kong, China. In 
the case of Macao, China, "intra -corporate transferees" means senior executives and senior managers who are 
employees of Hong Kong, Ch ina's juridical persons that provide services through a branch, subsidiary, 
corporation or joint venture established in Macao, China.  
15 See section 4.3.6 above on movement of natural persons.  WT/REG3 90/1/Rev.1  
 
- 16 - 
 
 
the Agreement it has listed the mode 4 commitments and related condition s as horizontal 
commitments. Moreo ver, a headnote in Annex 1 to the Agreement clarifies  that commitments made 
by Hong Kong, China under the Agreement shall not prevent it from adopting or maintaining non -
discriminatory measures which restrict or require specific types of legal entit ies through which a 
service supplier may supply a service, to achieve a legitimate policy objective. Hong Kong, China 
also reserves the right to adopt or maintain any measures with respect to: (i) the provision of public 
law enforcement, ambulance services , correctional services and firefighting services; and (ii) social 
services established for a public purpose, which may include health, education, housing, training, 
transport, public utilities, social security, and social welfare.  
4.4.1.2   Sector specific commitments  
4.18.   The following section identifies some of the main differences, by sector, between Hong Kong, 
China 's GATS schedule and its sector -specific commitments under the Agreement. It should also be 
read in conjunction with Annex 1 to the Agreement.  
Table 4.1 Hong Kong, China : comparison between the GATS and specific commitments  
under the Agreement  
Sectors / Sub -sectors  GATS  FTA 
Compared to 
GATS  Specific 
Commitments  
(Annex 1 ) 
1. Business services     
A. Professional  Services  Partial  Improved  Partial  
B. Computer  and Related  Services  Partial  Improved  Partial  
C. Research  and Development  Services  --- Same  --- 
D. Real  Estate  Services  Partial  Same  Partial  
E. Rental/Leasing  Services  without   
Operators  Partial  Improved  Partial  
F. Other  Business  Services  Partial  Improved  Partial  
2. Communication services     
A. Postal  services  --- Same  --- 
B. Courier  services  Partial  Same  Partial  
C. Telecommunication  services  Partial  Improved  Partial  
D. Audiovisual  services  Partial  Improved  Partial  
E. Other  --- Same  --- 
3. Construction and related engineering 
services     
A. General  construction  work for buildings  --- Same  --- 
B. General  construction  work for civil  
Engineering  --- Same  --- 
C. Installation  and assembly  work  --- Same  --- 
D. Building  completion  and finishing  work  Partial  Improved  Partial  
E. Other  Partial  Improved  Partial  
4. Distribution services     
A. Commission  agents'  services  --- Same  --- 
B. Wholesale  trade services  --- New Partial  
C. Retailing  services  Partial  Improved  Partial  
D. Franchising  --- Same  --- 
E. Other  --- Same  --- 
5. Education services     
A. Primary education services  --- Same  --- 
B. Secondary education services  --- Same  --- 
C. Higher education services  --- Same  --- 
D. Adult education  --- Same  --- 
E. Other education services  --- Same  --- 
6. Environmental services     
A. Sewage services  --- New Full 
B. Refuse disposal services  --- New Partial  
C. Sanitation and similar services  --- New Full 
D. Other  --- New Partial  
7. Financial services     
A. All insurance  and insurance -related  services  Partial  Same  Partial  
B. Banking  and other  financial  services  Partial  Improved  Partial  WT/REG3 90/1/Rev.1  
 
- 17 - 
 
 
Sectors / Sub -sectors  GATS  FTA 
Compared to 
GATS  Specific 
Commitments  
(Annex 1 ) 
8. Health related  and social services     
A. Hospital services  --- New Partial  
B. Other Human Health Services  --- New Partial  
C. Social Services  --- Same  ---  
D. Other  --- Same  --- 
9. Tourism and travel related services     
A. Hotels  and restaurants (including catering)  Partial  Improved  Partial  
B. Travel  agencies  and tour operators   
Services  Partial  Improved  Partial  
C. Tourist  guides  services  --- Same  --- 
D. Other  --- Same  --- 
10. Recreational and cultural and sporting 
services     
A. Entertainment  services  --- New Partial  
B. News agency services  --- Same  --- 
C. Libraries, archives, museum and other 
cultural services  Partial  Improved  Partial  
D. Sporting and other recreational services  --- Same  --- 
E. Other  --- Same  --- 
11. Transport services     
A. Maritime Transport Services  Partial  Improved  Partial  
B. Internal Waterways Transport  --- Same  --- 
C. Air  Transport  Services  --- Same  --- 
D. Space  Transport  --- Same  --- 
E. Rail  Transport  Services  --- New Partial  
F. Road  Transport  Services  --- New Partial  
G. Pipeline  Transport  --- Same  --- 
H. Services  auxiliary  to all modes  of  
transport  Partial  Improved  Partial  
I. Other  Transport  Services  --- Same  --- 
12. Other services not included elsewhere  --- Same  --- 
Note:  MFN and Horizontal commitments , as well as Mode 4 commitments/limitations not considered.  
Full: Specific commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes.  
Partial:  Specific commitments subject to some limitatio n(s) under market access or national treatment, under 
any of the three modes.  
---: No specific commitment.  
New: New commitments (full or partial, with or without limitations) which can, in most but not all cases, be 
seen as "improved".  
Improved: Overall im proved commitments under the Agreement compared to the GATS.  
Same:  Identical  commitments.  
Source:  Draft Consolidated GATS Schedule of Specific Commitments (S/DCS/W/HKG), prepared by the 
Secretariat (in 2003) and Hong Kong, China's Schedule annexed to the  Agreement  (Annex 1 ).  
4.4.1.2.1   Business services  
4.19.   While, under the GATS, partial commitments were made for a limited number of subsectors , 
under the Agreement, commitments are expanded  to also cover, with some limitations, some 
additional professional services, and a variety of other business services, with full unlimited coverage 
for advertising services, management consulting services, technical testing and analysis services, 
placement  and supply services of personnel, and printing and publishing. As under the GATS, 
research and development services remain unbound.  
4.4.1.2.2   Communication services  
4.20.   As under the GATS, there are no commitments in postal services in the Agreement, while 
courier servi ces continue to be partially covered  (unchanged as compared to commitments under 
the GATS) . With respect to telecommunication services, partially covered under the GATS, the 
coverage is expanded under the Agreement though a number of limitations are regist ered. The 
coverage of audiovisual services is also improved and motion picture and video tape production and 
distribution is fully covered without limitation s under the Agreement.  WT/REG3 90/1/Rev.1  
 
- 18 - 
 
 
4.4.1.2.3   Construction and related engineering services  
4.21.   General construction work and installation and assembly work remain unbound (unchanged 
as compared to commitments under the GATS). Some limited improvement s are made  by the 
Agreement with respect to national treatment coverage of mode 2 with respect to building 
completion and finishing  work as well as other construction services.  
4.4.1.2.4   Distribution services  
4.22.   Sectoral coverage is expanded under the Agreement, as compared to the GATS , with respect 
to wholesale trade services (unbound under the GATS) and full commitments are made in retailing 
services (excluding all pharmaceutical, medical, surgical and orthopaedic products)  for modes 1 and 
2. Commission agent services and franchising remain unbound, as under the GATS.  
4.4.1.2.5   Educational services  
4.23.   As under the GATS, Hong Kong, China does not make any comm itment in education services.  
4.4.1.2.6   Environmental services  
4.24.   While no commitments are made in the sector under the GATS, the Agreement has full 
coverage, without limitation s, in sewage services and s anitation and similar services. There are also 
similar commitment s for part of the refuse disposal services and other environmental services.  
4.4.1.2.7   Financial services  
4.25.   Hong Kong, China broadly matches its GATS commitments in insurance and insurance related 
services. With regard to  banking services, there is some market access improvement in one of the 
banking sub -sectors under the Agreement . 
4.26.   Specific disciplines applicable to financial services are contained in Article 21.  
4.4.1.2.8   Health related and social services  
4.27.   The sector is unbound un der the GATS. Under the Agreement, partial commitments restricted 
to mode 2 are made for hospital services and other human health services not elsewhere classified 
(CPC 93199).   
4.4.1.2.9   Tourism and travel related services  
4.28.   Partial commitments in the GATS on s ome ho tel and restaurant services and some travel 
agencies and tour operator services , are improved  under the Agreement, essentially with respect to 
the provision of certain services through modes 1 and 2.  Tourist guide services remain unbound.  
4.4.1.2.10   Recreational, cul tural and sporting services  
4.29.   Hong Kong, China builds on its commitments under the GATS to also cover entertainment 
services and to improve the coverage of libraries and archive services, while maintaining some 
restrictions.  
4.4.1.2.11   Transport services  
4.30.   As under the G ATS, internal waterways transport, air tran sport services, space transport, 
pipeline transport and other transport services remain unbound. With respect to rail and road 
transport services, that are unbound under the GATS, some limited commitments are made  under 
the Agreement in connection with freight in particular. GATS partial commitments in international 
maritime transport services are improved concerning modes 1 and 2 in respect of national treatment WT/REG3 90/1/Rev.1  
 
- 19 - 
 
 
under the Agreement. Some improvements are registere d in connection with the provision of some 
maritime auxiliary services through modes 1 and 2.  
4.4.2   Macao, China  
4.4.2.1   MFN and horizontal commitments  
4.31.   In its GATS schedule, Macao, China  scheduled partial  commitments in a limited  number of 
sectors  (rental and leasing services; some financial services; hotel and restaurants and travel 
agencies and tour operators services ). Under the Agreement, coverage is expanded to include a 
number of business services; courier, telecommunication, and audiovisual services; distribution 
services; some education services and some environmental services; some recreational and cultural 
and sporting services; and some services auxiliary to all modes of transport.   
4.32.   No MFN exemptions are scheduled under the GATS. The Agre ement does not contain any MFN 
treatment provision.  
4.33.   As it is the case for Hong Kong, China, Macao, China has no horizontal commitments under 
the GATS, though partial commitments under mode 4 are listed to cover most of the sub -sectors 
included in its GATS  commitments. Under the Agreement, as for its RTA partner, Macao, China 
makes horizontal commitments in relation to mode 4 (See Section 4.3.6 above on movement of 
natural persons).  
4.4.2.2   Sector specific commitments  
4.34.   The following section identifies some of the mai n differences, by sector, between Macao, 
China's GATS schedule and its sector -specific commitments under the Agreement. It should also be 
read in conjunction with Annex 2 of the Agreement . 
Table 4.2 Macao, China : comparison between GATS and specific commitments  under the 
Agreement  
Sectors / Sub -sectors  GATS  FTA 
Compared to GATS  Specific 
Commitments  
(Annex  2) 
1. Business services     
A. Professional  Services  --- Same  --- 
B. Computer  and Related  Services  --- New Partial  
C. Research  and Development  Services  --- Same  --- 
D. Real  Estate  Services  --- New Partial  
E. Rental/Leasing  Services  without   
Operators  Partial  Improved  Partial  
F. Other  Business  Services  --- New Partial  
2. Communication services     
A. Postal  services  --- Same  --- 
B. Courier  services  --- New Partial  
C. Telecommunication  services  --- New Partial  
D. Audiovisual services  --- New Partial  
E. Other  --- Same  --- 
3. Construction and related engineering 
services     
A. General  construction  work for buildings  --- Same  --- 
B. General  construction  work for civil  
Engineering  --- Same  --- 
C. Installation  and assembly  work  --- Same  --- 
D. Building  completion  and finishing  work  --- Same  --- 
E. Other  --- Same  --- 
4. Distribution services     
A. Commission  agents'  services  --- Same  --- 
B. Wholesale  trade services  --- New Partial  
C. Retailing  services  --- New Partial  
D. Franchising  --- New Partial  
E. Other  --- Same  --- 
5. Education services     
A. Primary education services  --- Same  --- WT/REG3 90/1/Rev.1  
 
- 20 - 
 
 
Sectors / Sub -sectors  GATS  FTA 
Compared to GATS  Specific 
Commitments  
(Annex  2) 
B. Secondary education services  --- Same  --- 
C. Higher education services  --- Same  --- 
D. Adult education  --- New Partial  
E. Other education services  --- New Partial  
6. Environmental services     
A. Sewage services  --- Same  --- 
B. Refuse disposal services  --- Same  --- 
C. Sanitation and similar services  --- Same  --- 
D. Other  --- New Partial  
7. Financial services     
A. All insurance  and insurance -related  services  Partial  Same  Partial  
B. Banking  and other financial  services  Partial  Same  Partial  
8. Health related and social services     
A. Hospital services  --- Same  --- 
B. Other Human Health Services  --- Same  --- 
C. Social Services  --- Same  --- 
D. Other  ---  --- 
9. Tourism and travel related services     
A. Hotels  and restaurants (including catering)  Partial  Improved  Partial  
B. Travel  agencies  and tour operators   
services  Partial  Improved  Partial  
C. Tourist  guides  services  --- Same  --- 
D. Other  --- Same  --- 
10. Recreational cultural and sporting 
services     
A. Entertainment  services  --- New Partial  
B. News agency services  --- Same  --- 
C. Libraries, archives, museum and other cultural 
services  --- New Partial  
D. Sporting and other recreational services  --- New Partial  
E. Other  --- Same  --- 
11. Transport services     
A. Maritime Transport Services  --- Same  --- 
B. Internal Waterways Transport  --- Same  --- 
C. Air  Transport  Services  --- Same  --- 
D. Space  Transport  --- Same  --- 
E. Rail Transport  Services  --- Same  --- 
F. Road  Transport  Services  --- Same  --- 
G. Pipeline  Transport  --- Same  --- 
H. Services  auxiliary  to all modes  of  
transport  --- New Partial  
I. Other  Transport  Services  --- Same  --- 
12. Other services not included elsewhere  --- Same  --- 
Note:  MFN and Horizontal commitments , as well as Mode 4 commitments/limitations not considered.  
Partial:  Specific commitments subject to some limitation(s) under market access or national treatment,  under 
any of the three modes.  
---: No specific commitment.  
New: New commitments (full or partial, with or without limitations) which can, in most but not all cases, be 
seen as "improved".  
Improved: Overall improved commitments under the Agreement compared  to the GATS.  
Same:  Identical commitments.  
Source:  Draft Consolidated GATS Schedule of Specific Commitments (S/DCS/W/MAC/Rev.1), prepared by the 
Secretariat (in 2003) and Macao, China's Schedule anne xed to the Agreement (Annex 2). 
4.4.2.2.1   Business services  
4.35.   Coverage under the Agreement is broadened compared to Macao, China's  GATS commitments  
(which partially cover  rental and leasing services with limitations) . New partial commitments, with 
some limitations, are made in computer and related services, real esta te services and some other 
business services, while commitments  under the Agreement for rental and leasing services build on 
those under the GATS, particularly with respect to the provision of services through modes 1 and 2.  
 WT/REG3 90/1/Rev.1  
 
- 21 - 
 
 
4.4.2.2.2   Communication services  
4.36.   Partia l commitments with some limitations are made under the Agreement with respect to 
courier services, some telecommunication services16 and some audiovisual services (all unbound 
under the GATS).   
4.4.2.2.3   Construction and related engineering services  
4.37.   As under the GATS , the whole sector remains unbound under the Agreement.  
4.4.2.2.4   Distribution services  
4.38.   Partial commitments with some limitations are made under the Agreement in wholesale trade 
services, retail services and franchising (all unbound under the GATS).   
4.4.2.2.5   Educational services  
4.39.   Under the GATS, the whole sector is unbound. Under the Agreement, Macao, China makes 
some limited commitments in adult education and some other education services. Companies that 
do not have statutory headquarters and their main administration in Macao, China must appoint a 
representative who resides in Macao, China and allocate capital to their activities in Macao, China.  
4.4.2.2.6   Environmental services  
4.40.   Partial commitments, with residency requirements, are made in cleaning services of exhaust 
gas and noise  abatement services. The rest of the sector, as under the GATS, remains unbound.  
4.4.2.2.7   Financial services  
4.41.   Under the Agreement, Macao, China replicates all the commitments, with the same 
limitations, as under the GATS.  
4.42.   Specific disciplines applicable to financial  services are contained in Article 21.  
4.4.2.2.8   Health related and social services  
4.43.   As under the GATS, the whole sector remains unbound under the Agreement.  
4.4.2.2.9   Tourism and travel related services  
4.44.   As under the GATS, partial commitments are made under the Agreement with respect to 
hotels and restaurants, and travel agencies and tour operator services. National treatment 
commitments without limitation s are made  in mode 2 for both subsectors (previously unbound under 
the GATS).  
4.4.2.2.10   Recreational, cultural and sporting services  
4.45.   While the sector is unbound under the GATS, under the Agreement, commitments are made, 
with residency and minimum capital requirements, in entertainment services; libraries, museums 
and other cultural services; and sporting services.  
 
 
 
                                                
16 The reference paper on basic telecommunications services is re ferenced in Macao, China's Schedule of 
specific concessions under the Agreement.  WT/REG3 90/1/Rev.1  
 
- 22 - 
 
 
4.4.2.2.11   Transport services  
4.46.   Under the GATS, the whole sector is unbound. Under the Agreement, partial commitments 
are made in storage and warehouse services; freight transport agency services, as well as other 
services auxiliary to all modes of transport (excluding air transport).   
4.5  Regulatory provisions  
4.5.1   Domestic regulation  
4.47.   The rules governing domestic regulation are in Article 20 . The Parties reaffirm the applicab ility 
of Article VI of the GATS and adopt  most of the GATS provisions. They however reserve the possibility 
to impose cond itions and/or limitations as listed in Annexes 1 or 2  to the Agreement . 
4.5.2   Recognition  
4.48.   The rules governing mutual recognition of professional qualifications are contained in 
Article  22. The Parties shall encourage mutual recognition of professional qualifications and promote 
the exchange of professional talent between each other.  
4.5.3   Subsidies  
4.49.   The Agreement does not contain any specific discipline s on subsidies other than Article 16 
(paragraph 5(ii) in particular) that clarifies that Chapter 8 (on trade in services) does not apply to 
subsidies.  
4.5.4   Safeguards  
4.50.   According to Article 23, the Parties reserve their right to establish or maintain any restrictive 
measure relating to services in the event that the implementation of Chapter 8 causes a substantial 
impac t on their respective trade and relevant sectors. Article 23 nevertheless contains a best 
endeavour clause which registers the Parties' resolve to notify each other fully and in a timely 
manner their intention to take any such measure. Moreover, the resolu tion of any safeguards -related 
issue shall be sought through consultation.  
4.5.5   Other  
4.5.5.1   Investment  
4.51.   Under Article 25, the Parties agree to commence discussions on an investment agreement to 
promote and protect investment .17  
4.6  Sector specific provisions on trade in s ervices  
4.6.1   Financial services  
4.52.   According to Article 21, one Party shall not be prevented from taking or maintaining measures 
relating to financial services for prudential reasons, which include s the protection of investors, 
depositor, policy holders or persons  to whom a fiduciary obligation is owed by a financial service 
supplier, or to ensure the integrity and stability of the financial system .18 
4.53.   Each Party reserves  the right to implement restrictive measures for any sectors not clearly 
covered by existing regulations.  
                                                
17 The Parties clarify that they will start the discussions on investment upon consensus.  
18 The term "prudential reasons" shall be interpreted as including the security, stabil ity, integrity and 
financial responsibility of a single financial institution or a financial system, as well as protecting the security of 
payment and clearing system and the stability of finance and operation.  WT/REG3 90/1/Rev.1  
 
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5  GENERAL PROVISIONS O F THE AGREEMENT  
5.1  Transparency  
5.1.  In the Economic and Technical Cooperation Work Programme established pursuant to Article 
28, the Parties will make use of the cooperation channels of their relevant departments to prom ote 
cooperation through various modes . The Parties commit to  strengthen cooperation with respect to : 
(i) the exchange of information on the enactment and revision of laws, regulations and rules in 
respect of investment, trade and other economic areas; (ii)  the dissemination in a timely manner of 
information on policies and regulations through various media including newspapers, journals, and 
websites; and (iii) the organization and support for the organization of various briefings and seminars 
on economic a nd trade policies and regulations . 
5.2.  Moreover, under Article 19, the Parties reiterate their observance of Article III of the GATS. 
They undertake to publish promptly all relevant measures of general application which pertain to or 
affect the operation of Chapter 8. Furthermore, Article 24 co ntains provisions on requests for 
information relating to services or service suppliers for statistical purposes and on the Parties' 
obligations  to protect confidential commercial information from leakage which may adversely affect 
the competitive position  of the service supplier.  
5.2  Current payments and capital movements  
5.3.  The Agreement does not contain any specific provision on current payments and capital 
movement.  
5.3  Exceptions  
5.4.  The provisions under the Agreement shall not affect the ability of either Party to m aintain or 
adopt any exception measure consistent with the WTO rules.  
5.4  Accession and Withdrawal  
5.5.  The Agreement does not contain any specific provision on accession to or withdrawal from the 
Agreement.  
5.5  Institutional framework  
5.6.  The Joint Steering  Committee is established by Article 30 to, inter alia , supervise the 
implementation of the Agreement ; interpret its provisions ; resolve disputes that may arise between 
the Parties during its implementation; amend the Agreement; and provide direction  to the work of 
the working groups it may establish. Liaison Offices are set up under the Joint Steering Committee .19 
Working groups may be set up as the need arises.   
5.6  Dispute settlement  
5.7.  The Parties shall resolve any problem arising from the interpretation or implementation of  the 
Agreement through consultation (paragraph 5 of Article 30). Consultations take place under the 
auspices of the Joint Steering Committee, which shall make all its decisions by consensus.  
5.7  Relationship with other agreements concluded by the Parties  
5.8.  The two Parties have both concluded a Free Trade Agreement with China containing similar  
provisions.  This is Macao, China's only other RTA currently in force.  
5.9.  Table 5.1 below shows the Parties' RTAs in force, notified and non -notified, other than the 
Agreement.  
                                                
19 The Liaison Offices are, for Hong Kong, Chi na, the Trade and Industry Department, and, for Macao, 
China, the Macao Economic Bureau.  WT/REG3 90/1/Rev.1  
 
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Table 5.1 Hong Kong , China – Macao , China : Participation in other RTAs (notified and 
non-notified in force), as of 26 April 2018  
RTA Name  Date of 
entry into 
force  Coverage  GATT/WTO Notification  
Year WTO Provision  
HONG KONG , CHINA  
Hong Kong, China - Chile 09-Oct-14 Goods & Services  2014 GATT Art. XXIV & GATS Art. V  
EFTA - Hong Kong, China  01-Oct-12 Goods & Services  2012 GATT Art. XXIV & GATS Art. V  
Hong Kong, China – New Zealand  01-Jan-11 Goods & Services  2011 GATT Art. XXIV & GATS Art. V  
China - Hong Kong, China  29-Jun-03 Goods & Services  2003 GATT Art. XXIV & GATS Art. V  
MACAO, CHINA  
China – Macao, China  17-Oct-03 Goods & Services  2003 GATT Art. XXIV & GATS Art. V  
Source:  WTO Secretariat.  
 
5.8  Government procurement  
5.10.   The Agreement does not contain any specific provision on government procurement.  
5.9  Intellectual property rights  
5.11.   Chapter 10  covers intellectual property rights. In Article 26, the Parties reiterate their 
observance of the WTO TRIPS Agre ement, as well as of provisions relating to intellectual property 
in other agreements that are applicable to them.  
5.12.   The Parties decide to intensify their joint efforts to strengthen cooperation in the area of 
intellectual property. Moreover, in the Economic  and Technical Cooperation Work Programme 
established pursuant to Article 28, the Parties agree to make use of various modes of exchange, 
including the existing cooperation channels and mechanisms of the ir relevant  departments to 
promote cooperation in intellectual property . The Parties  identify several areas for strengthened 
cooperation  which  include : (i) the exchange of information on new initiatives, laws, and regulations, 
as well as the promotion of public awareness through contact points and targeted a ctivities; (ii) 
personnel training; (iii) the exchange of information on information technology and automation 
system  relating to intellectual property registration ; and (iv) the promotion of the commercialisation 
of intellectual property and the fostering  of intellectual property intermediary services as well as 
intellectual property dispute resolution . 
5.10  Other  
5.10.1   Economic and technical cooperation  
5.13.   The enhancement of economic and technical cooperation between the Parties is addressed in 
Chapter 11. Cooperation in the identified areas will follow guidance and coordination by the Joint 
Steering Committee.  
5.14.   The Parties moreover will promote trade and in vestment facilitation through greater 
transparency, standard s conformity and enhanced information exchange.  
5.15.   Furthermore , an Economic and Technical Cooperation Work Programme identifies the 
cooperation mechanisms, the content of cooperation; and  the collaborating departments and 
organisations. The Work Programme may be expanded and amended at the request of either Party.  
__________