Discussions are being held with Mainland authorities to address the watch industry's concerns over meeting the Closer Economic Partnership Arrangement rules of origin.

Secretary for Commerce, Industry & Technology John Tsang said measures are being explored and hopes both sides will soon arrive at mutually acceptable arrangements.

Opening the Hong Kong Watch & Clock Fair today, Mr Tsang said a proper balance is needed between incentives to entice the setting up of manufacturing operations here and safeguards to protect workers' interests.

Since CEPA's implementation in January, watches and clocks are among the products eligible for zero tariff status under the arrangement.

Changes proposed

Mr Tsang said: "We have taken into account the watch and clock industry's views in formulating the CEPA rules of origin, but industry representatives have indicated to us that it would be difficult for the industry to benefit from the current arrangements."

The industry has proposed modifying the rules to enable more local manufacturers to benefit from CEPA and to support their efforts in promoting Hong Kong brand name products, particularly those at the higher end.

"We are well aware of these concerns, but we need to find the proper balance between incentives to entice the setting up of manufacturing operations here in Hong Kong and safeguards to protect the interests of our workers," Mr Tsang said.

"We are actually discussing these issues with Mainland authorities with the hope we would be able to arrive at some mutually acceptable arrangement before long."

Hong Kong is a leading exporter of watches and clocks with about US$5.4 billion worth exported last year, representing a solid 9% year-on-year growth.