Mainland and Macao Closer Economic Partnership Arrangement 
 
Preamble

To promote the joint economic prosperity and development of the Mainland1 and the Macao Special Administrative Region (hereinafter referred to as the "two sides"), to facilitate the further development of economic links between the two sides and other countries and regions, the two sides decided to sign the Mainland and Macao Closer Economic Partnership Arrangement  (hereinafter referred as to the "CEPA").

CHAPTER 1
GENERAL PRINCIPLES

Article 1
Objectives

To strengthen trade and investment cooperation between the Mainland and the Macao Special Administrative Region (hereinafter referred to as Macao) and promote joint development of the two sides, 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 sides;

2. Progressively achieving liberalization of trade in services through reduction or elimination of substantially all discriminatory measures between the two sides;

3. Promoting trade and investment facilitation.

Article 2
Principles

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

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

2. to be consistent with the rules of the World Trade Organisation (hereinafter referred to as the "WTO");

3. to accord with the needs of both sides to adjust and upgrade their industries and enterprises and to promote steady and sustained development;

4. to achieve reciprocity and mutual benefits, complementarity with each other's advantages and joint prosperity;

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

Article 3
Inception and Development

1. From 1 January 2004, the two sides will start to implement the specific commitments in liberalization of trade in goods and services under the "CEPA".

2. The two sides will broaden and enrich the content of the "CEPA" through continuous and further reciprocal liberalization between them.

Article 4
Non-application of Specific Provisions in
China's WTO Accession Legal Documents

The two sides recognise that through over 20 years of reform and opening up, the market economy system of 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 sides agree that Articles 15 and 16 of the "Protocol on the Accession of the People's Republic of China to the WTO" and paragraph 242 of the "Report of the Working Party on the Accession of China" will not be applicable to trade between the Mainland and Macao.

CHAPTER 2
TRADE IN GOODS

Article 5
Tariffs

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

2. From 1 January 2004, the Mainland will apply zero tariff to the import of those goods of Macao origin listed in Table 1 of Annex 1.

3. No later than 1 January 2006, the Mainland will apply zero tariff to the import of goods of Macao origin that are outside Table 1 of Annex 1. Detailed implementation procedures are set out in Annex 1.

4. Any new goods that are subjected to elimination of import tariffs in accordance with paragraph 3 of this Article shall be added to Annex 1.

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