Bill underpinning rules of origin in free trade agreement to be introduced into Legislative Council
The Commerce and Economic Development Bureau (CEDB) will introduce a bill into the Legislative Council on February 29 (Wednesday) amending the Trade Descriptions Ordinance (Cap. 362) to implement the more flexible rules of origin in the Free Trade Agreement (FTA) signed between Hong Kong and the European Free Trade Association (EFTA) (namely Iceland, Liechtenstein, Norway and Switzerland).
A spokesman for the CEDB said today (February 22), "The relevant rules make it easier for traders to enjoy tariff concessions, facilitating the entry of Hong Kong products into the EFTA states under more favourable terms."
The FTA Hong Kong signed with EFTA in June last year specifies that, in determining whether goods are made in the signatories to qualify for tariff concessions, one may refer not only to "process-based" rules but an alternative set of "value-based" rules of origin. The latter set makes reference to the proportion of value added in a certain place. Products more likely to benefit are those that undergo high value-adding processes (such as assembly in tandem with product design) in Hong Kong, produced from relatively low-cost raw materials.
"The place of manufacture is a type of trade description. We propose to incorporate the 'value-based' rules into the Ordinance so that traders can mark their products in accordance with the law," the spokesman said.
The "value-based" rules proposed in the Bill will be applicable to the FTA with the EFTA, and similar agreements that may be signed in the future. The traditional process-based "last substantial transformation rules" will not be affected.
The Bill will be published in the Gazette on February 24.
Wednesday, February 22, 2012