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The Financial Secretary of the HKSAR Government, Mr Antony Leung, and the Vice Minister of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) of the Central People's Government, Mr An Min, met in Beijing today (January 25) to kick off the formal discussions on a proposal by the Chief Executive, Mr Tung Chee Hwa, late last year to establish some form of a free trade area.

During the meeting, both sides exchanged views on the preliminary concept of the proposal, and established the principles, the mode of operation and channel for discussions. The proposal is now named "Mainland/HK Closer Economic Partnership Arrangement (CEPA)".

On the principles of discussions, both sides agreed that they should comply with the following :

1. The relevant WTO rules and the "One country, Two systems" principle should be observed;

2. The CEPA should be mutually beneficial, and take into account the trends of economic development in the two places;

3. The consultations should be progressive, starting with the less difficult areas;

4. The political, business and academic communities of the two places would be widely consulted in the process;

5. Both sides will work actively together to take forward the proposal with a view to achieving continuous progress.

The arrangement will cover the trading of commodities and services, as well as trade and investment facilitation. The Mainland and the HKSAR Government will soon conduct respective extensive consultations on the areas covered by the "Arrangement".

On the discussion mechanism, Vice Minister Mr An Min, will head an expert group of the MOFTEC on the Mainland side and the Financial Secretary will lead a special taskforce on the HKSAR side. The special task force will comprise officials from the Commerce and Industry Bureau, Trade and Industry Department, and other relevant bureaux and departments. In addition, a "Senior Officials Consultation Mechanism", co-chaired by Director-General of the Department of Taiwan, Hong Kong and Macau Affairs, MOFTEC and the Director-General of Trade and Industry of HKSAR, will be established to deal with the technical aspects. Both sides agreed to meet regularly as there are numerous and complicated issues involved. The Vice Minister and the Financial Secretary have also instructed the officials concerned to work urgently on the details of the "Arrangement". Senior officials will conduct this afternoon an informal discussion on the issues involved in the "Arrangement" to exchange their views.

While in Beijing, Mr Leung and his delegation met with the Minister of MOFTEC, Mr Shi Guangsheng.

The second round of consultations is tentatively scheduled for March. Prior to that, senior officials from both sides will liaise closely and continue to discuss about on the content of the "Arrangement" to exchange their views.

End/Friday, January 25, 2002

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Photo: The Financial Secretary, Mr Antony Leung, meets with the Minister of Foreign Trade and Economic Cooperation, Mr Shi Guangsheng (right) in Beijing.