Following is the transcript of remarks made by the Chief Executive, Mr Tung Chee Hwa, at a press conference at the Conrad Hotel, Brussels, on Monday, October 20, 1997 (Brussels time).

CE: Good afternoon. This is my first full working day in Brussels. I've had a busy day meeting with the officials of the European Commission as well as attending a meeting of the Hong Kong/European Union Business Co-operation Committee gathered here to talk about co-operation between Europe and Hong Kong. I just also met with the Prime Minister of Belgium, had a very useful discussion with him. The purpose of my visit is really to explain to our friends in Europe about the progress since the Handover, how well we are doing and also to see how Europe and Hong Kong can deepen our relationship to our mutual benefit. I will be very happy to answer any questions you might have.

Cliff Bale, RTHK: I want to ask you about some comments that Sir Leon Brittan made to us earlier this afternoon relating to visa-free access. He spoke about the need for Hong Kong to show to member countries of the European Community the solidity of the Hong Kong regime, as he put it, its commitment to strict immigration control and vigorous anti-drug enforcement. He put forward these as examples which could show and try to help the way to gain visa-free access. So I would like your comments on the visa-free access question in general and these criteria that he speaks about in particular.

CE: Well I think visa-free access is something quite important, and as you know many, many countries around the world have in fact given visa-free access, including countries such as Canada, the United Kingdom, Singapore, Malaysia and so on and so forth. There are obviously countries who have not yet given us visa-free access and the problem is complicated because of the many different arrangements you have here in Europe, such as the Schengen area, how do they apply. So these are issues we have to work at and eventually, hopefully we will be able to persuade all the members of the European Union that Hong Kong's passport regime is strong and effective. But it will probably take a bit of time, as I said just a few hours ago it is a long-term effort which we will continue to be working at. The countries we have spoken to are all basically quite sympathetic but it will take a bit of time to work through it. Some good examples for instance are the United States, as you know has given Hong Kong Passport holders 10-year visas which is what the United States did before and Germany has recently announced it will give five-year visas to SAR Passports. These are good moves in the right direction and we will keep on working at it to make sure these countries will find our Passport is just as good as anybody else's.

Bloomberg News: Concerning the Customs Co-operation Agreement that you hope to reach. First of all can you just tell us what exactly such an agreement would mean to Hong Kong's economy to facilitate trade and why you have chosen this as your first trade initiative with Europe and in what way you think this agreement will the first one in a series within the European Union?

CE: This agreement, which was talked about this morning, is one area where there was a lot of common interest. Obviously the European Union want to have a very good Customs regime and we want Hong Kong to have the same thing. And these are the areas we can work together, we have a lot of common interest both to our mutual benefit and we hope to do so rather more quickly.

John Ellison, Oriental Daily News: (Inaudible) relating to Leon Brittan's words today, and other people here seem not particularly concerned at what in England, we quite often hear in Britain, about the lack of democracy in Hong Kong and the diminished franchise which you are proposing for 1998, they seem less concerned here in Europe, do you find that Britain is more concerned with this issue of franchise in Hong Kong than the Europeans are?

CE: Well I think democracy is very much alive in Hong Kong, we are moving forward. There will be elections next year, next May, and it will be a very open and fair election and Britain is concerned, Europe is concerned, we are very concerned about it in Hong Kong. But we are going forward in our way, in what we believe is right and in the long-term interests of Hong Kong and we will do that in accordance with the Basic Law. The Basic Law is very clear on how we move ahead. And I just want to tell you that the Basic Law has clearly mapped out the democratic evolution over the next 10 years and after the end of that 10-year period it is up to us people in Hong Kong to decide how we want to move forward, with universal suffrage being the ultimate objective. So we all care very much about democracy.

Belgian reporter: Mr Tung I understand that under the one country, two systems Hong Kong has full autonomy in conducting its international economic relations. At the same time I was a bit astonished to see that during the last IMF meeting in Hong Kong there were 99 visas denied to the Taiwan (inaudible) members who usually attend these kind of meetings (inaudible). So will you please comment on that, is that a breach of the one country, two systems policy.

CE: It is not a breach of one country, two systems. If the people who applied were attending World Bank meetings, or IMF meetings as part of the World Bank/IMF meetings, visas would be granted to them. But they were not part of that meeting at all, they came separately for different reasons and in Hong Kong we have been enforcing what we have always been enforcing in terms of rules and regulations for visitors from Taiwan. But if they were attending World Bank/IMF meetings visas would be given to them. There were subsequent sub-level, sub-cabinet level ministers who attended an APEC meeting and visas were given to them.

Belgian reporter: Mr Tung, in the first half of this year one of our correspondents visited a private meeting of Christians in Communist China. He himself told us that policemen came arrested all present persons and began to torture them by pressing their fingernails with machines. Mr Tung it is a matter of fact that in Communist China thousands of Christians are in prison, tortured and killed up to now. My question, do you have the intention to extend the same things to Hong Kong?

CE: Well in Hong Kong, religious freedom and a whole lot of other freedoms are guaranteed under the Basic Law, so certainly we will observe the Basic Law to the fullest extent. Insofar as China is concerned, I would like to suggest you visit China and see for yourself what is happening in China. The degree of religious freedom is far more than what has ever happened in the country and I would really like to invite you to visit the country and see for yourself. But as far as Hong Kong is concerned we would do it in accordance with one country, two systems, freedom of religion, freedom of speech, freedom of expression, they are all guaranteed by the Basic Law. And in the four months since the return of Hong Kong, four months since July First, our lifestyle hasn't changed a bit.

Far Eastern Economic Review: There was a question in the past about having a trade agreement with the EU, is that still on your agenda and is there interest in having a separate trading agreement in preference to a Customs agreement, more ambitious if you like. And secondly, would you like to comment on talks with Sir Leon (Brittan) on China's accession to the WTO.

CE: I think insofar as the second question is concerned, obviously both European Union, Sir Leon and myself, we all expressed the wish that China should join the WTO really as soon as possible. And from my point of view, I think it is unrealistic for China not to be in the WTO. And from Hong Kong's point of view, China joining the WTO has a great benefit to Hong Kong itself, so we very much hope China will join the WTO soon. Insofar as the first point, I will ask Denise (Secretary for Trade and Industry Miss Denise Yue) to answer, she can probably do it much better than I can.

STI: Sir Leon and I have in fact been discussing various ways of deepening and broadening the economic and trade relationship between the European Union and Hong Kong. And one of the things we looked at, was what one of your colleagues asked about, was a bilateral Customs co-operation agreement. And here I would like to supplement. One of the reasons we are entering into informal discussions with the European Commission on Customs Co-operation Agreement it is because we wish to underline Hong Kong's status as a separate Customs territory. We believe a bilateral agreement on Customs co-operation would send the right message to the whole world and would demonstrate the one country, two systems concept being implemented to the fullest. We will also look at other ways of deepening and broadening the economic relationship with the European Union and I would like to think there are many ways of doing this. Just at 3 o'clock to 5 o'clock this afternoon business people from Hong Kong and business people from different members states of the European Union met, again, with that very objective in mind. So there are many, many ways of developing closer, deeper and broader economic and trade relationship with the European Union and we will continue to explore on that particular front.

Belgian World Service: A local question to ask. You are just back from a meeting with Mr Dehaene (Belgian Prime Minister Jean-Luc Dehaene). Could you tell me what kind of things were raised in that discussion?

CE: Well, of course, I was fortunate to have the chance to meet the Prime Minister last week in Hong Kong. He was there for another meeting, so it was really a follow-up. We discussed a whole range of issues about co-operation within the EU and Hong Kong, Belgium and Hong Kong. Belgium is quite active in Hong Kong in a whole lot of areas so we also talked about how we can enhance that relationship further. Hong Kong is beginning a new era and the relationship with Belgium and the EU is very important. We also explored the issue of visa-free access and a number of other things. We had a very friendly meeting.

Julie Mapleston, TVB News: Can you expand a little on what was raised about the Vietnamese Refugees and were you given any indication that the European countries would take the refugees this time (inaudible)?

CE: Obviously this question was raised and there is sympathy to what Hong Kong is facing. I appealed to the EU to help out in this and there is a lot of sympathy. I think these are long-term things we really have to work at it and this is not something you can get very good answers right away I'm afraid.

Cliff Bale, RTHK: Can I just follow up on that. Did the people you talked to, what did they agree in this respect?

CE: Well, they were sympathetic and they will pass on what we discussed to the member states because it is up to member states to make their decisions.

Question (unknown reporter): A follow up on the China accession to the WTO issue. Earlier on, you said earlier today, you said Sir Leon (Brittan) briefed you on his visit to China. Do you share his view that the principles that were agreed are a significant breakthrough in their chances to join the WTO?

CE: I think any understanding of this nature is helpful to serve as a guide for negotiations in the future and I think progress is being made steadily and I just hope it can go much faster than it's been happening.

Yuen Chan, ATV News: Mr Tung you are visiting Brussels today and arriving in London tomorrow. Is it a sign of the new post-handover order that Britain comes second?

CE (laughter): No this is not the reason. It's just a question of organising the schedules and the people who are available, when are they available and you try to do as many things as you can when visit a different place, and it just works out that way.

Miss Chan: But is the European relationship now more important now than the UK relationship?

CE: I think the European relationship is important, but the British relationship is just as important and it's just a question is that it works out that way, that's all.

Belgian reporter: Can you please be more specific about what this Customs Co-operation Agreement. Does it mean co-operation on negotiations or does it mean that it's only negotiations on (inaudible).

CE: I'll let Miss Yue explain this one.

STI: The coverage of a Customs Co-operation Agreement essentially will include elements such as facilitating the exchange of information between the two Customs authorities concerned. I think it would also include trade facilitation to the extent that some degree of harmonisation can be achieved in the Customs procedures of the signatories to the agreement, that would also facilitate trade and be of productive use to business people. I think it would also include confidentiality, how the two Customs authorities will treat information passed to each other in confidence to facilitate Customs enforcement. These are some of the common headings that you will find in bilateral Customs Co-operation Agreements. The international Customs organisation, which is called the WCO, the World Customs Organisation, in fact has prepared a model text of Customs Co-operation Agreements and no doubt I think it would be useful for the European Commission as well as Hong Kong to refer to that model text drafted by the World Customs Organisation while we start a serious discussion with each other.

Mark Turner, European Voice: Did you have any discussions on the adoption of the Euro (European Currency) and I was wondering if you would say anything on how you think the advent of the Euro will affect Hong Kong with European nations and whether those countries which stay out will be disadvantaged as far as Hong Kong is concerned.

CE: Yes, we did have a chance to talk about the Euro. As you can imagine Hong Kong is a trading entity, and any major change of this sort may have a long-term impact on Hong Kong. And we spent time trying to understand how Euro is moving forward and there appears to be a very realistic expectation now that on January 1st 1999 the Euro will come into being and the impact of such a major happening in Hong Kong is of course a great deal of interest to us and we are following this very closely. Obviously we want to be sure we are not disadvantaged in any way. But if you look down the road, three, five years down the road, seven years down the road, I think Euro will be a successful and strong currency.

Photos of the Chief Executive's visit in Belgium