With the approval of the State Council, vice Minister of Commerce Wang Shouwen and Secretary for Administration and Justice of Macao Special Administration Region Government Leong Vai Tac signed Mainland and Macao Closer Economic Partnership Arrangement Agreement on Trade in Services (hereinafter referred to as “the agreement”) in Macao on November 28, 2015. The agreement will be officially implemented on June 1, 2016. Attending the signing ceremony were acting Chief Executive of the Macao Special Administration Region Leong Vai Tac, Deputy Director of Central Government’s Liaison Office in Macao SAR Yao Jian, and Deputy Commissioner of the Ministry of Foreign Affairs’ Office of Commissioner in Macao Pan Yundong.

The agreement is the first free trade agreement in which the whole mainland will fully open the trade in services areas through pre-access national treatment with a negative list, signifying that the whole mainland and Macao basically realize the liberalization of trade in services. The agreement made principle provisions on its relation with CEPA, application range, obligation, national treatment, the most preferential treatment, finance prudence principle, safeguard measures, exception clause, preserved restrictive measures, cross-border service, telecommunication and culture chapter, special procedures, information requirement and investment facilitation. The annex of the agreement includes the restrictive measures the mainland preserves for Macao with a negative list under commercial presence model and the mainland’s new open measures to Macao in cross-border services, telecommunications and cultural areas by means of positive list and restatement of the contents of former CEPA.

Based on the pilot experience of implementing the Mainland and Macao CEPA Agreement on the Basic Realization of Liberalization of Trade in Services between Guangdong Province and Macao SAR (hereinafter referred to as the “Guangdong agreement”), the agreement aims to further expand the mainland’s service industry to Macao. The highlights of the agreement are listed as follows: firstly, it’s more open at higher levels. The number of areas that the mainland opens to Macao in service sector will reach 153, involving 95.6% of the WTO’s 160 service areas, 62 of which realize the national treatment, with 4 new departments compared with Guangdong Agreement. In areas with a negative list, only 120 items of restrictive measures were made, 12 fewer than Guangdong Agreement’s 132 items. Among these, market access of 28 items of restrictive measures will be further loosened. In areas with a positive list such as cross-border service, culture and telecommunications, the new added open measures reach 28 items. Secondly, it is clearly stated that Macao will enjoy the most preferential treatment in the whole mainland. It means that all free trade agreements that China signs with other countries and regions also apply to Macao once they have measures better than the CEPA. Thirdly, it will further establish and perfect the support management system which adapts to the negative list model. Except restrictive measures preserved in the agreement, and the establishment of enterprises in telecommunications and cultural areas and financial institutions, the Macao service providers invested in the mainland’s service trade domain which is open to them. Their company establishment companies, contract changes and the corporate constitution approval are changed as filing management, making it easier for Macao business to enter the mainland market.

The mainland and Macao’s basic realization of liberalization of trade in services is not only conducive to Macao’s diverse economic development, but also injecting new vigor into the mainland’s service industry. It’s conducive to comprehensive and deep Mainland-Macao economic integration and common economic development.

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