Macau, China: March 2001

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TRADE POLICY REVIEW BODY: REVIEW OF MACAU, CHINA
TPRB'S EVALUATION  

The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of Macau, China and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996, 1998 and 2000), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), Côte d'Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2000), Fiji (1997), Finland (1992), Ghana (1992 and 2001), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995,1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macau, China (1994 and 2001), Madagascar (2001), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).

 
 
TRADE POLICY REVIEW BODY:   REVIEW OF MACAU, CHINA
CONCLUDING REMARKS BY THE CHAIRPERSON Back to top

This review has provided us with much greater insight into the trade policies, practices and measures of Macau, China. Members commended Macau, China for the fact that neither the Asian financial crisis, which erupted in 1997, nor its reversion to the People's Republic of China in 1999 has materially affected the Territory's liberal trade and trade-related policies. The trade and investment regime of Macau, China continues to be among the most open in the world. The Government's approach has long been to let free and open markets be the main determinant of the allocation of resources within the Territory and thus its economic development. This approach to economic policy is to continue into the foreseeable future under the Territory's Basic Law, which provides for “one country, two systems” and ensures the continuity of its long-standing free trade tradition.

Members welcomed the continuing commitment of Macau, China to the primacy of the WTO, in which it had actively participated. They also expressed their appreciation of efforts by Macau, China to undertake economic and administrative reform. While the linked exchange rate system might have limited the scope for controlling the money supply, the system had maintained currency stability.
Members welcomed the free port status of Macau, China, but observed that only some 24% of all tariff lines are bound. They encouraged Macau, China to increase tariff bindings so as to enhance the confidence of traders and investors.
Questions were raised about non-tariff measures, with attention being focused on the simplification of customs procedures and the import licensing regime. The use of sanitary and phytosanitary measures was also queried. Although Macau, China has no laws or regulations governing anti-dumping or countervailing actions and no such action has been taken during the period under review, Members asked about the legal basis of any such measures that might be imposed in the future. While there is no legislation regarding safeguard measures, the Chief Executive is empowered nevertheless to prohibit, restrict, attach conditions to, or impose levies on goods whose admission into the Territory is “not advisable”.
Members sought clarification on the use of tax incentives to encourage exports and to promote investment. The rationale for using a system for leasing government-owned land as a potential instrument of economic policy was also queried. Some Members expressed the view that industrial policy should not undermine the Territory's open trade policy, which has served the economy so well.
Members acknowledged that Macau, China has made important efforts to implement the TRIPS Agreement through the amendment of its laws; nonetheless, they urged it to take further steps to improve the enforcement of these laws. Members welcomed efforts by Macau, China to simplify its government procurement procedures and transparency, as well as its plans to become more involved in the Working Group on Transparency in Government Procurement.
Macau, China is a service-based economy and the authorities' objective is to develop the Territory into a regional services centre. However, Members expressed concern that the granting by the Government of exclusive rights to private companies could impair competition and thus hamper the economic development of Macau, China. At the same time, Members noted and welcomed the Territory's recent efforts to liberalize specific services (notably telecommunications). The paucity of commitments made by Macau, China in the services negotiations was also noted; Members requested Macau, China to expand its commitments under GATS in the ongoing services negotiations. With textiles and clothing continuing to be the key industrial activity and major contributor to merchandise exports, Macau, China has also incentives to promote the establishment of high-value-added industries; Members sought information on the nature and effect of these incentives.
Members also sought additional details on a number of other policies and measures, including:

• efforts to increase labour productivity;

• the status of the creation of a new customs service and the implementation of a computerized system for customs clearance;

• steps taken to encourage export diversification;

• efforts to reduce the trans-shipment of textiles and clothing and the possibility of denying export licences to companies convicted of illegal trans-shipment;

• clarification of the extent to which foreigners are allowed to participate in the provision of services; and

• criteria for the granting of licences for the establishment of financial institutions in Macau, China.

Members expressed their appreciation for the written and oral responses provided by the delegation of Macau, China to advance questions as well as those posed during the meeting.

To conclude, I feel that we should commend Macau, China for maintaining an open market throughout the Asian financial crisis. Despite the economic difficulties, Macau, China has consistently adhered to WTO principles and continued to support the multilateral trading system. Macau, China also expressed its willingness to offer more commitments in ongoing and future trade negotiations, noting that the needs and concerns of developing countries members should be taken into account.

Finally, I am sure that the maintenance by Macau, China of one of the world's most liberal trade and investment regimes will undoubtedly contribute to the Territory's economic recovery and its future prosperity.