WORLD TRADE  
ORGANIZATION   
WT/REG291/M/1 
17 April 2012 
 (12-2011) 
Committee on Regional Trade Agreements 
Sixty-first Session  
 
 
 
CONSIDERATION OF THE CLOSER ECONOMIC PARTNERSHIP AGREEMENT 
BETWEEN HONG KONG, CHINA AND NEW ZEALAND, GOODS AND SERVICES 
 
Note on the Meeting of 20 March 2012 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 64th Session of the Committee on Regional Trad e Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WT O/AIR/3888/Rev.1, dated 9 March 2012.  
2. Under Agenda Item D.III of this session, the CRTA considered the Closer Economic 
Partnership Agreement between Hong Kong, China a nd New Zealand (hereinafter 'the Agreement'), 
goods and services.  
3. The Chairman noted that the Agreement had entered into force on 1 January 2011.  It 
had been notified to the WTO by the Parties on 3 January 2011 under Article XXIV:7(a) of 
the GATT 1994 and the Understanding on the Inte rpretation of Article XXIV of GATT 1994 
as an Agreement establishing a free trade area (document WT/REG291/N/1) and under GATS Article V:7(a) as an Agreement providing for the liberalization of trade in services within the 
meaning of Article V of the GATS (document S/C/N/ 558).  The text of the Agreement was available, 
together with its Annexes, on the Parties' official  websites.  The Factual Presentation on the goods and 
services aspects (document WT/REG291/1 dated 6 January 2012) had been prepared by the Secretariat on its own responsibility in full cons ultation with the Parties, in accordance with 
paragraph 7(b) of the Transparency M echanism for Regional Trade Agreements 
(document WT/L/671).  In addition, written ques tions and replies on the Agreement had been 
distributed in documents WT/REG291/2 and WT /REG291/2/Rev.1 (English only) dated 15 and 
16 March 2012, respectively.  He proposed to orga nize the consideration of the Agreement by first 
asking the Parties and then other Members for gene ral comments.  The Committee would then turn to 
the specifics of the Agreement, using the Factual Presentation, to guide the debate and then through 
the questions and replies document. 
4. The representative of Hong Kong, China thanke d the Secretariat for the factual presentation 
which succinctly described the trade relations be tween the Parties, and provided very detailed 
information on the key elements of the Agreement.   The Agreement was a major step in Hong Kong, 
China's trade history as it was the first Free Trad e Agreement (FTA) with a foreign economy and had 
strategic significance in enhancing the prospects of its further pursuit of RTAs.  Following the 
Agreement, Hong Kong, China had signed an FTA  with EFTA members and had started formal 
negotiations with Chile.  The Agreement represented a significant step forward in the bilateral trade 
relationship between the Parties and elevated the re lationship to new heights.  For Hong Kong, China, 
New Zealand was a very important  trading partner in terms of common values and aspirations for 
trade liberalization.  Both Parties were strong a dvocates of free trade and shared the same values in 
the promotion of regional and inte rnational economic cooperation, in  the WTO and elsewhere.  In 
signing the Agreement, Hong Kong, China had taken its rights and obligations under the WT/REG291/M/1 
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  WTO agreements seriously, particularly those in GATT Article XXIV and GATS Article V.  The 
Agreement was comprehensive in scope and commi tments, which were of  high quality and went 
beyond their WTO commitments in many areas.  In tr ade in goods, while tariff levels between the two 
economies were already low, the Agreement provided fu ll certainty to exporters.  Upon the entry into 
force of the Agreement, Hong Kong, China bou nd its existing zero-tariff regime for all goods 
originating in New Zealand immediately, while Ne w Zealand had started to progressively eliminate 
all its remaining tariffs, which would be fully rem oved by 2016.  Under the Agreement, the Parties 
would also cooperate in sanitary and phytosanitary measures, technical barriers to trade and customs 
procedures, with the objective of reducing trade ba rriers and facilitating bilateral trade as much as 
possible.  In trade in services, the Parties had achieved a high-quality outcome by building on existing 
GATS rights and obligations and by adopting a negative-list approach for scheduling their 
commitments.  Broad commitments covering a comprehensive list of services sectors, had been made, of which some were not only "WTO-plus" but also "Doha-plus".   
5. Apart from market access comm itments, the Parties had agreed on, among other things, 
robust disciplines on domestic regulation to ensu re that the commercial value of their services 
commitments would not be undermined by unnecessarily trade-restrictive domestic regulation.  They 
had also agreed on an overarching provision on MFN treatment, which enabled service suppliers of 
each Party to enjoy the other Party’s additional ser vices commitments in its future RTAs.  WTO-plus 
commitments in the movement of business persons , granting business persons temporary entry under 
favourable conditions, had also been made.  In a ddition to trade in goods and services provisions, the 
Agreement contained provisions to promote compe tition, ensure effective protection of intellectual 
property rights, facilitate access to  each other's government procurement market, and encourage the 
development and use of electronic commerce.  Commitments and cooperation in these areas, which 
had the positive effect of facilitating bilateral trad e and investment flows, were in line with the 
relevant WTO Agreements and Asia-Pacific Econom ic Co-operation (APEC) principles, and with 
their respective domestic regimes.  The Agreemen t would help pave the way for mutual economic 
growth and build stronger trade and investment linkages between the Parties.  They had also 
committed to review the Agreement and consider issues of mutual interest in trade in services, with a 
view to further liberalise bilateral trade in services on a progressive and mutually advantageous basis.  
He thanked Members for their interest and especia lly Japan, Chinese Taipei and the United States for 
their written questions, to which written an swers had been provided in document 
WT/REG291/2/Rev.1.  He also thanked Chile for its questions to which written replies would be 
provided, as well as to follow-up questions from the United States. 
6. The representative of New Zealand thanked th e Committee for the opportunity to provide a 
short introduction to the Agreement.  As Hong Kong,  China had mentioned, the Agreement, signed in 
March 2010 and which had entered into force on 2011 represented a highly significant step in 
advancing their bilateral trade re lationship and enhancing opportun ities for regional cooperation.  
Hong Kong, China was one of New Zealand's top te n trade and investment partners, as well as an 
important partner within the WTO and the Asian region, including in the APEC.  The Agreement 
complemented New Zealand's FTA with China, and given Hong Kong, China's position as a regional 
trading and investment hub, supported New Zealand business engagement with the wider region.  It 
guaranteed market access certainty and established a clear framework to support the next phase of 
growth and development in bilate ral trade and economic relations.  It was designed to facilitate 
growth in trade and business development, enc ourage ease of doing business and promote economic 
cooperation and innovation.  Hong Kong, China gran ted duty-free entry to all New Zealand goods 
into its market, while New Zealand committed to re duce its tariffs progressively over six years, which 
would be fully eliminated by 2016.   In addition, the Agreement included a range of areas that marked 
it out as a modern, forward-looking bilateral trade arrangement.  These included commitments on 
services, government procurement, intellectual prop erty and trade remedies, as well as provisions 
covering rules of origin, cooperation on customs procedures, sanitary and phytosanitary measures, 
technical barriers to trade and movement of business persons.    WT/REG291/M/1 
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  7. In liberalizing trade in services, the adoptio n of a transparent outcome formed a very 
important part of the Agreement and provided a ra nge of new commitments that delivered greater 
certainty and predictability to their services suppliers  in developing their bilateral trade connections.  
As Hong Kong, China had mentioned, the Agr eement included new rules concerning domestic 
regulation that had taken their bila teral partnership beyond standards reached to date in the WTO or in 
their other RTAs.  This would provide greater certa inty and transparency for its services suppliers, 
particular in relation to qualification and licensi ng procedures.  In addition, in recognition of the 
importance of education in its bilateral servic es relationship, the Agreement also included an 
Annex on Education Cooperation and envisaged the development of closer links between relevant 
New Zealand and Hong Kong, China educational agen cies and institutions in this area.  He was 
pleased to advise that an education cooperation arrangement giving expression to aspects of this 
Annex had been subsequently c oncluded in October 2011.  As Hong Kong, China had noted, the 
Agreement also incorporated review provisions, both  in specific areas and overall.  Since its entry into 
force, the Parties had worked hard to put in  place the institutional mechanisms for its smooth 
functioning and further development and were lo oking forward to the first meeting of the Joint 
Commission in Wellington in March 2012.  In this regard, both Parties were currently engaged in 
negotiating a comprehensive Investment Protocol as envisaged at the conclusion of the Agreement's 
negotiation.  New Zealand remained deeply committed  to the multilateral trading system and to the 
importance of trade liberalisation through negotia tions under the WTO framework.  It viewed the 
pursuit of high quality RTAs such as that be tween New Zealand and Hong Kong, China as 
complementary and consistent with the multilatera l framework and believed that such agreements 
could make a useful contribution to moving multilate ral trade negotiations forward, by highlighting 
the benefits of liberalization.  He thanked all th e Members who had submitted questions, to which the 
Parties had provided answers.  They would answer  questions recently submitted by Chile and the 
U.S., as well as any further questions.  
8. The representative of the United States thanked the Secretariat and the Parties for their 
presentations and for answering their questions.  She commended the Parties for the comprehensive 
liberalization embodied in the Agreement.  
9. The representative of the European Union poin ted out there was one RTA concluded by New 
Zealand (with Malaysia), which had not been notified.   She asked whether this notification was to be 
made in the current year.  
10. The representative of the Secretariat said this  agreement had recently been notified and the 
factual presentation would be amended accordingly. 
11. The representative of the United States thanked th e Parties for their extensive answers.  She 
had a few follow-up questions in services and due to their highly-technical nature, she would 
understand if the questions could not  be answered in the spot.  With regard to question 15(a) 
(document WT/REG291/2/Rev.1), she asked whether the Parties could point to the provision in 
Chapter 14 that provided for the elimination of di scrimination, in the sense of GATS Article XVII, 
with respect to services provided thro ugh Mode 4.  She also asked them to confirm that they remained 
free to require the establishment of a representative office or other form of commercial presence as a 
condition for the supply of cross-border services th rough mode 4.  Regarding question 15(c), she 
asked the Parties to describe how their mode 4 commitments under the Agreem ent compared to those 
under the GATS in terms of the nature of the obliga tions in both agreements.  She asked also to 
identify those provisions of the Agreement (if any) th at provided disciplines applicable to mode 4 in  
market access restrictions (in the sense of GATS Article XVI); domestic regulations (in the sense of GATS Article VI); and recognition (in the sense of GATS Article VII). 
12. With regard to question 16(a) on limitations on fo reign capital participation, one of the most 
prevalent and restrictive barriers to mode 3 services trade, she asked whether the Parties believed that WT/REG291/M/1 
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  Article XVI.2(f) of the GATS was superfluous a nd created no additional substantive obligation 
beyond that already required under Article XVII and if they could explain.  With respect to 
question 18(a), she asked the Parties to elaborate on their answer and give reasons for potential doubt 
on this matter.  With respect to question 19, the answer to question 11 described what various bodies 
in the Parties did, or had done.  She asked wh at specific actions the Parties had undertaken to 
"facilitate dialogue," as required under Artic le 10.5 of Chapter 13 of the Agreement. 
13. The representative of the European Union had a follow-up to question 1 on the Investment 
Protocol between the Parties.  The EU understood that pursuant to letters signed and exchanged on the 
date of the signature of the Agreement, the Partie s had agreed to conclude an Investment Protocol 
within two years from the entry into force of the Agre ement, i.e. by no later than end 2012.  She asked 
whether the Parties could clarify the legal nature of the Protocol and whether it would be formally 
incorporated into the Agreement.  Second, she asked them to confir m whether the Protocol was likely 
to be concluded within the e xpected timeline and whether it would contain both pre- and post-
establishment elements . 
14. The representative of New Zealand thanked th e EU and USA for their follow-up questions. 
As the questions were technical in nature, the r esponses would be better provided in writing.     
15. The Chairman said that the considerati on of the goods and services aspects of the 
Closer Economic Partnership Ag reement between Hong Kong, China and New Zealand had allowed 
the Committee to clarify a number of questions and oral discussion of the RTA could now be concluded in accordance with para graph 11 of the Transparency Mechanism.  If any delegations 
wished to ask follow-up questions they were i nvited to forward submissions in writing to the 
Secretariat by 27 March 2012 and Parties were asked to submit replies in writing by no later than 
10 April 2012.  In accordance with paragraph 13  of the Transparency Mechanism all written 
submissions, as well as minutes of the meeting would be circulated promptly, in all WTO official languages, and would be made available on the WTO website. 
16. The Committee took note of the comments made. 
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