WORLD TRADE  
ORGANIZATION  WT/REG163/4 
31 January 2005 
 
 (05-0375) 
Committee on Regional Trade Agreements Original:   English 
  
 
CLOSER ECONOMIC PARTNERSHIP ARRANGEMENT 
BETWEEN CHINA AND MACAO, CHINA 
 
SERVICES ASPECTS
 
 
Communication from the Parties  
  The following communication, dated 26 January 2 005, is being circulated at the request of the 
Delegations of China and Macao, China.  
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I. BACKGROUND INFORMATION ON THE ARRANGEMENT 
1. Membership And Dates Of Signature, And Coming Into Effect 
 The Parties to the Mainland and Macao Closer Economic Partnership Arrangement 
(hereinafter referred to as the “CEPA”) are the Peopl e’s Republic of China (hereinafter referred to as 
the “Mainland”
1) and Macao, China (hereinafter referred to as “Macao”2). The Mainland and Macao 
signed the Main Text and the six A nnexes of the CEPA on 17 October 20033. The CEPA entered into 
force on 1 January 2004.   
 
The Mainland and Macao signed the Supplem ent to the Mainland and Macao Closer 
Economic Partnership Arrangement (h ereinafter referred to as the “Supplement to the CEPA”) on 29 
October 2004 on further trade liberalization under the second phase of the CEPA.  The major 
liberalization measures set out in the Supplement to the CEPA took effect on 1 January 2005.  
 
The CEPA was notified on 27 December 2003 purs uant to paragraph 7(a) of Article XXIV of 
the GATT 1994 and the Understanding on the Interpreta tion of Article XXIV of the GATT 1994, and 
in accordance with paragraph 7(a) of Article V of the GATS. The Notification of the CEPA can be found in the double symbol document WT/REG163/N/1 – S/C/N/265. The text of the CEPA can be 
found in document WT/REG163/1. The Supplement to  the CEPA was notified on 26 January 2005. 
 
2. Type Of Arrangement 
The CEPA provides for the liberalization of trad e in services within the meaning of Article V 
of the GATS.  Article 1 of the CEPA specifically  states that the objectives of the CEPA are to 
                                                     
 
1 In the CEPA, "Mainland" refers to the entire cust oms territory of the People’s Republic of China. 
2 In the CEPA, "Macao" refers to th e Macao Special Administrative Region  of the People’s Republic of 
China.  
3 The CEPA (including the Supplem ent to the CEPA) are signed in the Chinese language, and only the 
Chinese text is authentic. The original full texts of th e CEPA (including the Supplement to the CEPA) and the 
English translation are available on th e following websites: www.mofcom.gov.cn , www.economia.gov.m o. WT/REG163/4 
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 strengthen trade and investment cooperation between  the Mainland and Macao and to promote joint 
development of the Mainland and M acao through the implementation of, inter alia , progressive 
liberalization of trade in services through reduction or  elimination of substantially all discriminatory 
measures.  
3. Scope 
 The liberalization measures of trade in services ar e set out in Annex 4 to the CEPA.   There is 
no a priori  exclusion of any service sector or mode of supply under the CEPA.  Article 3 of the CEPA 
provides that the Mainland and Macao will broade n and enrich the content of the CEPA through 
continuous and further reciprocal liberalization betw een them. Article 11.2 of the CEPA further states 
that at the request of either side, the two sides may, through consultation, pursue further liberalization 
of trade in services between them.   
 The CEPA contains separate sections on financ ial cooperation, cooperation in tourism as well 
as mutual recognition of prof essional qualifications [Articles 13-15 of the CEPA].  
  The CEPA also covers trade in goods.  The asp ects of the CEPA related to trade in goods are 
notified in a separate document (WT/REG163/3).  In  addition, the CEPA contains provisions on trade 
and investment facilitation in its Chapter 5 and Annex 6.    The Supplement to the CEPA is a supplement to CEPA in order to further liberalize trade in 
goods and trade in services in the Mainland for Macao.  It comprises three annexes, namely, the list of 
additional products that are given zero tariff prefer ence, the rules of origin for these products, and 
further liberalization measures on trade in services.  Consequently, Supplement to the CEPA contains 
supplements and amendments to Annexes 1, 2, 4 and 5 to the CEPA. In this Communication, 
references to the CEPA or any of its Annexes incl ude, where the context permits, references to their 
respective supplements and amendments as set out in the Supplement to the CEPA. 
 4. Economic And Trade Data  
 Both the Mainland and Macao are still deve loping the methodology for collecting data on 
services trade.  It is difficult to provide complete services statistics due to the limited historical information on services trade at this moment. 
 
II. PROVISIONS AFFECTING TRADE IN SERVICES 
 
1. Provisions Of The Arrangement Relating  To The Elimination Of Article XVII 
Inconsistent Measures 
As stipulated in Article 1.2 of the CEPA, one  of the objectives of  the Arrangement is 
to progressively achieve liberali zation of trade in se rvices through reduction or elimination of 
substantially all discriminatory measures be tween the Mainland and Macao.  Annex 4 to the 
CEPA sets out accordingly the timetable and content in accordance with which the two sides will reduce or eliminate existing re strictive measures against services and service suppliers of 
the other side.  Specifically, Article 5 of A nnex 4 provides that Macao will not impose any 
new discriminatory measure on Mainland’s servi ces and service supplie rs in those service 
sectors covered under the CEPA, whereas the Mainland provides preferential treatment for 
Macao services and service suppliers by removi ng or eliminating the restrictions in the 
service sectors as set out in Annex 4 to the CEPA.   WT/REG163/4 
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 1.1. Treatment of Services and Servi ce Suppliers from Third Countries 
 
Service suppliers of other WTO Members that  are juridical persons  established under 
the laws of one side will be entitled to th e same treatments granted to its own service 
suppliers by the other side under the CEPA, pr ovided that they are en gaged in substantive 
business operations as stipulated in Annex 5 to  the CEPA (including a ny relevant supplements 
and amendments as set out in the Supplement to  the CEPA) in the area of the former side 
[Article 12.2 of the CEPA].   
2. Rules Of Origin 
 Annex 5 to the CEPA (including any relevant supplements and amendments as set out in the 
Supplement to the CEPA) sets out the definition and related provisions on service suppliers in which 
“service supplier” refers to any person th at supplies a service. In this context: 
(i) “person” means either a natu ral person or a juridical person; 
(ii) “natural person”: 
(a) in the case of the Mainland, means its citizen; 
    (b) in the case of Macao, means its permanent resident;  
(iii) “juridical person” means any le gal entity duly constituted or otherwise 
organized under the applicable laws of  the Mainland or Macao, whether for 
profit or otherwise, and whether priv ately-owned or governmentally-owned, 
including any corporation, trust, partnership, joint venture, sole proprietorship or association (business association). 
3. Standards/Recognition 
 The two sides will encourage mutual recogn ition of professional qualifications and promote 
the exchange of professional talents between each  other. Competent authorities and professional 
bodies of both sides will, in consultation with each  other, consider and design specific methodologies 
for mutual recognition of professional qualif ications [Article 15 of the CEPA]. 
4. Safeguards 
 The CEPA does not contain any specific provision s on safeguards relating to trade in services. 
5. Subsidies and State-Aid 
 The CEPA does not contain any specific provisions on subsidies or state-aid relating to trade 
in services. 
6. Government Procurement 
The CEPA does not contain any specif ic provisions on government procurement.  
 WT/REG163/4 
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 7. Sector-Specific Provisions 
 Articles 13 and 14 of the CEPA provide for respectively financial cooperation and 
cooperation in tourism between the two sides in a ddition to the liberalization measures specifically 
provided for in Annex 4 to the CEPA. 
III. GENERAL PROVISIONS OF THE ARRANGEMENT 
 
 Please refer to Section III of WT/REG163/3. 
 
IV. OTHER 
 
 Please refer to Section IV of WT/REG163/3.  
 
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