China Hong Kong Trade Agreement

The two sides agree to promote cooperation in eight areas: facilitation of customs clearance, quarantine and inspection of raw materials, quality assurance and food security, cooperation between small and medium-sized enterprises, cooperation in Chinese medicine and medicine, e-commerce, promotion of trade and investment, and transparency of legislation and regulations. 11 In the first four months of the agreement, 869 certificates of origin were applied for under the EPA and 813 were authorised, mainly in textiles and clothing (310 licensed) and pharmaceuticals (209). In the first quarter of 2004, the decline in exports of products from Hong Kong to China continued, but at a slower pace than in 2003 (-8.4% versus -11.9%), with no change attributable to the EPA. Between January 1 and May 21, 2004, the value of duty-free products was less than HK400 million (US$50 million). 13More than forty applications have been submitted to extend the scope of the EPA to other products that, in most cases, are not manufactured in Hong Kong. But the process of renewing the agreement is long and complex and the abolition of tariffs will not come into force until 1 January 2005. In any event, this would be only one year ahead of the total abolition of tariffs on all Hong Kong domestic exports to mainland China on 1 January 2006. 273 classes of goods from Hong Kong can be exported to the mainland duty-free. In addition, for other categories of „Made in Hong Kong” products, the continental continent agreed to apply a zero import tariff from 1 January 2006, when local producers requested other product codes that are kept in the Chinese customs system and comply with THE EPA`s rules of origin.

HKSAR undertakes to apply it to the import of all products on the continent and not to impose restrictive rules for trade in these products. Rules of origin: a product is classified as „made in Hong Kong” if it fulfils the rules of origin of the EPA. Local investors in Hong Kong, mainland China and overseas can create new production sites in Hong Kong, so that products subject to high tariffs on the mainland are eligible for EPA rules of origin and do not benefit from mainland tariffs.