CEPA IV: Headlines and Fine Print

By Susan Lavender, DLA Piper*, Hong Kong

Marking the third anniversary of the Closer Economic Partnership Arrangement (CEPA) between the People's Republic of China (PRC) and Hong Kong, the third supplement to CEPA (CEPA IV)¹ was announced on June 29 2006, following signature on June 27 2006 by the PRC and Hong Kong governments (the Sides). CEPA is a bilateral arrangement for the facilitation of trade and investment between the Sides but it largely consists of the PRC's concessions to Hong Kong since Hong Kong generally does not impose barriers to foreign trade and investment.

CEPA IV is the slimmest CEPA phase to date and no official signing ceremony was held in its honour. Nevertheless, CEPA IV was forecast to be the vehicle to redress any previous service sector concessions that were perceived to be lacking in substance² and to strengthen CEPA's trade and investment facilitation measures (TIF). In light of CEPA IV, will Hong Kong barristers be pleading cases in PRC courts? Will Hong Kong travel agents be organizing holidays for PRC residents to travel around the world? It is perhaps unlikely, as the answers may be found by reading the fine print in between CEPA IV's headlines.