The People's Republic of China (China) and the Macau Special Administrative Region of the PRC (Macau) signed, on October 17 2003, the Mainland and Macau Closer Economic Partnership Arrangement (CEPA). The purpose of this agreement, which is an FTA-like arrangement concluded between two separate customs territories of a single sovereign state, is to promote the joint economic prosperity and development of China and Macau, as well as to enhance the level of economic and trade cooperation between them. Moreover, CEPA is an open agreement, that is, its contents can be continuously deepened, enriched or amended, according to the economic needs of the two parties. In this regard, over the past decade, 10 supplements to CEPA have been signed, the last of which – Supplement X to CEPA – was signed on August 30 2013, and will come into effect on January 1 2014.
CEPA covers mainly three areas of trade, including trade in goods, trade in services, and trade and investment facilitation. The focus of Supplement X to CEPA is placed, to a great extent, on trade in services. In fact, China has agreed to implement 65 new measures in relation to Macau, which translates as a broadening of the preferential market access in the province of Guangdong given to Macau service sectors, including legal services, banking services and financial (securities) services. In addition, new facilities will be awarded in the field of funeral services.
As a result of said preferential market access, Macau service suppliers are provided with an earlier access to the Chinese market, ahead of the timetable China has committed to the WTO. In some sectors, such as audiovisual services, transport services, and hospital services, the concessions are in fact more favourable than those of China's WTO commitments.
Another important amendment introduced by Supplement X to CEPA is the loosening of market restrictions in the Province of Fujian. Macau service providers are now permitted to establish in mainland China commercial stations of light (passenger) vehicles, with the capital percentage held not exceeding 49%. The traffic and transport authorities of the province of Fujian are responsible for carrying out the authorisation requests. Finally, the new supplement enhances cooperation with respect to intellectual property rights.
In conclusion, Supplement X to CEPA is yet another step towards the liberalisation of trade in services between China and Macau. However, in order to plainly achieve such liberalisation, yet further steps must be taken.
Pedro Cortés, Marta Mourão Teixeira and Nuno Soares da Veiga