Laws of the People's Republic of China

Ministry of Commerce

Mainland and Macao Closer Economic Partnership Arrangement

Ministry of Commerce

Oct 17, 2003

Preamble

The Mainlandi and the Macao Special Administrative Region (hereinafter referred to as the "two parties") decided to sign the Mainland and Macao Closer Economic Partnership Arrangement (hereinafter referred to as the Arrangement) for the purpose of bringing about economic prosperity and development in both of the two parties and strengthening trade and economic relations of the two parties with other countries and regions.

Chapter I General Provisions

Article 1

Objectives

To strengthen trade and investment cooperation between the Mainland and the Macao Special Administrative Region (hereinafter referred to as "Macao") and bring about joint development of the two parties through the implementation of the following measures:

(1)

progressively reducing or eliminating tariff and non-tariff barriers on substantially all the trade in goods between the two parties;

(2)

progressively realizing liberalization of trade in service through reduction or elimination of substantially all discriminatory measures;

(3)

promoting trade and investment facilitation.

Article 2

Principles

The conclusion, implementation and amendment of the Arrangement shall adhere to the following principles:

(1)

to abide by the principle of "one country, two systems";

(2)

to comply with the rules of World Trade Organization;

(3)

to accord with the needs of both parties to adjust and upgrade their industries and to promote steady and sustained development;

(4)

to achieve reciprocity and mutual benefit, mutual complementary advantages and joint prosperity;

(5)

to take progressively action, dealing with the easier subjects before the more difficult ones.

Article 3

Establishment and Development

(1)

The two parties shall implement the specific commitments in liberalization of trade in goods and services under the Arrangement as of January 1, 2004.

(2)

The two parties will broaden and enrich the content of the Arrangement through continuous and further reciprocal liberalization between each other.

Article 4

Non-application of specific provisions in China's WTO Accession Legal Documents

The two parties recognize that through over two decades' reform and opening up, the market economy system the Mainland has been continuously improving, and the mode of production and operation of Mainland enterprises is in line with the requirements of a market economy. The two parties agree that Articles 15 and 16 of the Protocol on the Accession of the People's Republic of China to the World Trade Organization and Paragraph 242 of the Report of the Working Group on the Accession of the People's Republic of China to the World Trade Organization will not be applicable to trade between the two parties.

Chapter II Trade in Goods

Article 5

Tariffs

(1)

Macao will continue to apply zero tax to all imported goods of Mainland origin.

(2)

The Mainland will apply zero tax to the imported goods of Macao origin listed in Table 1 of Annex 1 as of January 1, 2004.

(3)

The Mainland will apply zero tax to the imported goods of Macao origin that are not in Table 1 of Annex 1 no later than January 1, 2006. The detailed implementation procedures are set out in Annex 1.

(4)

Any goods whose import tariffs are eliminated in accordance with paragraph 3 of this Article shall be added to Annex 1.

Article 6

Tariff Rate Quota and Non-tariff Measures

(1)

Neither party shall apply non-tariff measures that don't comply with the rules of the World Trade Organization to the imported goods originated from the other party.

(2)

The Mainland will not apply tariff rate quota to the imported goods of Macao origin.

Article 7

Antidumping Measures

The two parties undertake that neither party shall apply antidumping measures to the imported goods originated from the other party.

Article 8

Subsidies and Countervailing Measures

The two parties reiterate to comply with the Agreement on Subsidies and Countervailing Measures of the World Trade Organization and Article XVI of the General Agreement on Tariffs and Trade 1994, and undertake not to apply countervailing measures to the imported goods originated from each other.

Article 9

Safeguards

If one party's import of one product listed in Annex 1 and originated from the other party increases sharply because of the implementation of the Arrangement and has caused serious injury or threat of serious injury to the affected side's domestic industry that produces like or directly competitive products, the affected party may temporarily suspend concessions on the import of the concerned product from the other party after giving written notice, and shall, at the request of the other party, promptly commence consultations under Article 19 of the Arrangement in order to reach an agreement.

Chapter III Origin

Article 10

Rules of Origin

(1)

The rules of origin applicable to preferential measures related to trade in goods under the Arrangement are set out in Annex 2.

(2)

In order to ensure the implementation of the preferential measures regarding trade in goods, the two parties decide to establish and strengthen mutual administrative assistance, including the establishment and strict implementation of the procedures for issuing certificates of origin, the establishment of auditing and regulatory mechanisms, the development of computer link and electronic data interchange between the issuing and regulatory authorities of both parties. Details are set out in Annex 3.

Chapter IV Trade in Services

Article 11

Market Access

(1)

Either party shall reduce gradually or eliminate existing restrictive measures against services or service suppliers of the other party in accordance with the content and timetable set out in Annex 4.

(2)

At the request of either party, the two parties may further liberalization of trade in services between them through consultation.

(3)

Any measures on liberalization of trade in services implemented in accordance with paragraph 2 of this Article shall be added to Annex 4.

Article 12

Service Suppliers

(1)

The definition of "service suppliers" and relevant provisions under the Arrangement are set out in Annex 5.

(2)

Service suppliers of other members of the World Trade Organization that are legal persons established under the laws of one party and are engaged in substantive business operations as stipulated in Annex 5 in the area of the said party will be entitled to preferential treatments granted by the other party under the Arrangement.

Article 13

Financial Cooperation

The two parties shall adopt the following measures to further strengthen cooperation in the fields of banking, securities and insurance:

(1)

The two parties support Mainland financial institutions in developing business in Macao;

(2)

The two parties support Mainland banks in developing network and business in Macao through acquisition;

(3)

The two parties encourage, assist and support business exchanges between banking, securities and insurance institutions of Macao and the Mainland;

(4)

The two parties strengthen cooperation and information sharing between the financial regulatory authorities.

Article 14

Cooperation in Tourism

(1)

For the purpose of further promoting the development of the tourism industry in Macao, the Mainland will allow residents in Beijing, Shanghai, and Guangzhou, Shenzhen, Zhuhai, Dongguan, Zhongshan, Jiangmen, Foshan, and Huizhou of Guangdong Province to visit Macao individually. This measure shall be implemented in the entire Guangdong Province no later than July 1, 2004.

(2)

The two parties shall strengthen cooperation in tourism promotion, including promotion of to tourism between each other and external promotion programmes centered around the Pearl River Delta.

(3)

The two sides shall cooperate to raise the service standards their tourism industries and protect the legitimate rights and interests of tourists.

Article 15

Mutual Recognition of Professional Qualifications

(1)

The two parties shall encourage mutual recognition of professional qualification and promote the exchange of professional talents between each other.

(2)

Competent authorities or professional bodies of both parties will study and design specific methodologies mutual recognition of professional qualifications through consultation.

Chapter V Trade and Investment Facilitation

Article 16

Measures

The two parties shall promote trade and investment facilitation by through greater transparency, standard conformity and enhanced exchange of information.

Article 17

Fields of Cooperation

(1)

The two parties shall strengthen cooperation in the following fields:

(i)

trade and investment promotion;

(ii)

customs clearance facilitation;

(iii)

commodity inspection, sanitary and phytosanitary inspection and quarantine, food safety, health quarantine, certification and accreditation, and administration standardization;

(iv)

electronic commerce;

(v)

transparency in laws and regulations;

(vi)

cooperation between small- and medium-sized enterprises;

(vii)

cooperation of industries.

(2)

Details on the fields of cooperation listed in paragraph 1 of this Article are set out in annex 6.

(3)

At the request of either party, the two parties may expand the scope and content of cooperation in trade and investment facilitation through consultation.

(4)

Any new cooperation fields or content concluded under paragraph 3 of this Article shall be added to Annex 6.

Chapter VI Other Provisions

Article 18

Exceptions

The Arrangement and the provisions in its annexes shall not affect the ability of the Mainland or Macao to maintain or to adopt exception measures which are in line with the rules of the World Trade Organization

Article 19

Institutional Arrangements

(1)

The two parties shall establish a Joint Steering Committee (hereinafter referred to as the "Committee"). The Committee shall comprise senior representatives or officials designated by the two parties.

(2)

Liaison offices shall be set up under the Committee. Working groups may be set up as the need arises. Liaison offices shall be set up in the Ministry of Commerce of the Central People's Government and Director General's Office of the Economic and Financial Department of the Macao Special Administrative Region respectively.

(3)

The functions of the Committee include:

(i)

supervising the implementation of the Arrangement;

(ii)

interpreting the provisions of the Arrangement;

(iii)

settling disputes that may arise during the implementation of the Arrangement;

(iv)

drafting additions and amendments to the content of the Arrangement;

(v)

steering the work of the working groups;

(vi)

dealing with any other business relating to the Arrangement.

(4)

The Committee shall convene meetings at least once a year, and may convene special meetings within 30 days upon request by either party.

(5)

The two parties shall settle any problems arising from the interpretation or implementation of the Arrangement through consultation in the spirit of friendly cooperation.

Article 20

Miscellaneous

(1)

Unless otherwise provided in the Arrangement, any action taken under it shall not affect or nullify either party's rights and obligations under other agreements to which it is a contracting party.

(2)

The two parties shall try to avoid adding any restrictive measures affecting the implementation of the Arrangement.

Article 21

Annexes

The Annexes to the Arrangement form an integral part of the Arrangement.

Article 22

Amendments

If necessary, the two parties may amend the provisions of the Arrangement or its Annexes in writing. Any amendment shall not come into effect officially until the authorized representatives of both parties have signed it.

Article 23

Coming into Effect

The Arrangement shall come into effect as of the date of signature by the representatives of both parties.

The Arrangement shall be written in Chinese, in duplicate.

The Arrangement shall be signed on October 17, 2003 in Macao.

Vice Minister of the Ministry of Commerce of the People's Republic of China

General Director of Economic and Financial Department of Macao Special Administrative Region of the People's Republic of China

(i)

In this Arrangement, the Mainland refers to the entire customs territory of the People's Republic of China.