Feature

CEPA Agreement on Trade in Goods Signed in Macao
CEPA Upgrade Completed

Secretary for Economy and Finance Leong Vai Tak and the then Vice Minister of Commerce People’s Republic of China Fu Ziying sign the CEPA Agreement on Trade in Goods

The then China International Trade Representative cum Vice Minister of Commerce People’s Republic of China Fu Ziying and the Secretary for Economy and Finance of Macao Special Administrative Region Leong Vai Tak signed the CEPA Agreement on Trade in Goods (the Agreement) in Macao on 12 December 2018. The Agreement helps Macao in joining the development momentum of the country, fostering the moderate diversification of Macao’s economic development and intensifying the economic exchange and collaboration between the Mainland and Macao. The establishment of the Agreement embodies the generous support given by the Central Government to Macao and it creates even more favorable conditions for made-in-Macao products to access the Mainland’s market. It has responded to the needs of Macao’s industries and helps them to steal a march in the Mainland’s market. The Agreement becomes effective on 1 January 2019.

As an important component of CEPA’s upgrade, the Agreement, together with the previously signed Agreement on Trade in Services, Investment Agreement, Agreement on Economic and Technical Co-operation, symbolises the completion of CEPA’s upgrade ahead of the schedule planned in the country’s 13^th Five-year Plan.

Integrating the economic developments in the Mainland and Macao over the 15 years from the CEPA was signed, taking into consideration the latest developments and achievements of agreements on trade in goods in international markets and regional economic co-operations, the Agreement consolidated and compiled the contents in CEPA concerning trade in goods. On the foundation where trade in goods between the two areas is fully liberalised, the Agreement furthers the deregulation for trade and provides even more comprehensive institutional arrangements for trade in goods between the two areas. The Agreement introduces a general rule of origin (General Rule) for products in all tariff classifications and integrates part of Product Specific ROOs (PSRs) to establish a standard rule of origin for more than 8,000 items of goods. The employment of General Rule is expected to enhance the flexibility of rules of origin and the flow of goods between the two areas, meeting the needs of the industry while pushing forward the sustainable growth of Macao’s manufacturing industry.

In addition, the Agreement contains a chapter concerning the facilitations for the Guangdong-Hong Kong-Macao Greater Bay Area, including a series of collaborative measures that enhance the facilitations for trade in goods, an innovative customs clearing procedure, and a number of collaborative examination models such as “integrated examinations for express clearing” and “entry inspection and exit surveillance”. Study and research will be carried out regarding customs clearance simplification, facilities of trade single window interconnection, exchange of digital data of goods, favourable conditions for food originated from the Mainland and processed in Macao, in order to improve the customs clearance efficacy and efficiency of ports, and allow freer movement of goods in the Greater Bay Area.

From 1 January 2004, when CEPA was brought into effect, to November 2018, the Economic Bureau issued 5,418 CEPA certificates of origin, 4,793 of which are in use. The value of zero-tariff goods exported to the Mainland reached MOP 940 million, implying that nearly MOP 665 million of tax was exempted. These goods include cement, ready-made clothes, yarn, plastic bag, compact disc-recordable, typewriter ribbon and ink, food and beverage (candy, biscuit, nuts, coffee bean, coffee powder, distilled water), copper-clad laminate, electrical busway, chemicals (thinner, glue, tetracycline, etc.), stamp, printer ribbon, footwear, crude glycerol, recycled plastic particles, cosmetic product, industrial monocarboxylic fatty acid, glass fibre. In the first 11 months in 2018, the value of CEPA zero-tariff goods exported to the Mainland was approximately MOP 81.15 million, implying a 43-fold increase compared with the MOP 1.836 million back in 2004 when CEPA just started its implementation.