. /.  RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/REG163/M/3 
15 May 2006 
 (06-2351) 
Committee on Regional Trade Agreements 
Forty-Second Session  
 
 
 
EXAMINATION OF THE CLOSER ECONOMIC PARTNERSHIP ARRANGEMENT 
BETWEEN CHINA AND MACAO, CH INA, GOODS AND SERVICES 
 
Note on the Meeting of 4 April 2006  
 
Chairman:  Mr. A. Egger (Switzerland) 
  
1. The meeting was convened in document WTO/AIR/2786/Rev.1. 
2. Under Agenda Item C.X of its 42
nd Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) took up the third round of examination of the Closer Economic Partnership Arrangement (CEPA) between Chin a and Macao, China, Goods and Services. 
3. The Chairman
 noted that the proceedings of the firs t and second rounds of examination of the 
CEPA between China and Macao, China, Goods and Services (hereinafter the Agreement), which had 
taken place in February 2005 and January 2006, had been distributed respectively in documents 
WT/REG163/M/1-2.  Since then, the Parties had pr ovided replies to questions put by delegations 
which had been circulated in document WT/REG163/6.   
A. G OODS ASPECTS  
4. Given the advanced stage of the examination, the Chairman  asked delegations wishing to 
comment or ask questions on the Agreement to iden tify the relevant section of the Standard Format 
contained in document WT/REG163/3. 
5. The representative of the United States , under Section I.3, Background Information on the 
Agreement, asked whether the six per cent of pr oducts not entering duty free into Mainland China 
were not covered by the Agreement because the rules or origin had not yet been agreed or because 
they failed to meet CEPA origin requir ements.  The representative of Macao, China  replied that the 
product coverage under CEPA of Macao, China's tota l exports was 94.2 per cent.  This meant that 
almost all products already enjoyed zero tariff tr eatment.  Under the CEPA there was a mechanism 
whereby manufacturers could apply to get their products included under CEPA for zero tariff 
treatment.  Then, the Parties would discuss and work out  the rules of origin for that product.  In 2004 
and 2005, every applicatio n had been accepted.  Th e representative of China  added that the reason for 
the remaining six per cent of trade not entering tari ff free was that the manufacturers of those products 
had not applied for duty-free treatment. 
6. Under Section II, Trade Provisions.  Rules of Origin, the representative of the United States  
said that in answer to question 8 of document WT/REG163/6 the Parties had stated that "due consideration has been paid to Macao’s pro duction capacity and the need on exporting to the 
Mainland".  In her view, these criteria were not sta ndards that were typically applied in determining 
the country of origin so she requested the Par ties to further elaborate on the purpose of those 
standards.  The representative of China
 considered that the sentence quoted by the representative of WT/REG163/M/3 
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  the United States was not that relevant.  As long as Macao, China could produce a product 
domestically, its enterprises were en titled to apply for duty -free rules of origin.  However, he could 
submit a written response if requested. 
7. The Chairman
 observed that the Committee seemed to have exhausted the factual inquiry and 
proposed that the Secretariat begin drafting the re port for this examination.  It was so agreed . 
B. SERVICES ASPECTS  
8. Given the advanced stage of the examination, the Chairman  asked delegations wishing to 
comment or ask questions on the Agreement to iden tify the relevant section of the Standard Format 
contained in document WT/REG163/4.  In the absence of questions by delegations, the chairman observed that the Committee seemed to have exhaus ted the factual inquiry and proposed that the 
Secretariat begin drafting the report for this examination.  It was so agreed
. 
9. The Committee took note  of the comments made. 
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