The Mainland and Hong Kong authorities have been working closely to thrash out the arrangements for the rules of origin for the products which will enjoy zero tariff under the second phase of the Mainland and Hong Kong Closer Economic Partnership Arrangement, Secretary for Commerce, Industry & Technology John Tsang says.

Briefing members of the Legislative Council Panel on Commerce & Industry on the latest progress of CEPA, Mr Tsang said, since the conclusion of CEPA II, three rounds of meetings between experts of both sides have been held and drafting of the text of the relevant arrangements is underway.

The Government will announce the implementation details as soon as possible, he added.

For zero-tariff products under CEPA II, it is expected that around 60 to 70% of the Mainland products codes will adopt the process-based origin rules.

Less than 10% to adopt '30% value-added' requirement

While most of the rest of the products will adopt the "Change in Tariff Heading" approach, only 7 to 8% will use the "30% value-added" requirement.

On CEPA III consultations, Mr Tsang said CEPA adopted a building-block approach. Starting from January 1, the Trade & Industry Department will accept applications for the next phase of tariff elimination from local manufacturers.

The department will process the applications and submit the relevant information to the Ministry of Commerce before June 1 for discussions.

Further liberalisation in services trade also sought

The Government will continue to pursue further liberalisation on services trade with an aim to commencing consultations on the next phase of CEPA as early as possible.

"No timeframe for the consultations has been set. The relevant bureaux and departments of the Government have been in constant dialogue with the business community to seek their views on further liberalisation measures," Mr Tsang said.