Unprecedented RTA Practices between the Customs Territories of China

• Author: Liang Zhang
• Position: Associate Professor of International Law at Sun Yat-sen University, China. LL.D. (Xiamen).
• Pages: 81-104

ARTICLE

Unprecedented RTA

Practices between the

Customs Territories of

China

Liang Zhang



China consists of four customs territories: the mainland, Hong Kong, Macau, and

Taiwan. Each customs territory is an independent member of the WTO as well. To

strengthen and promote regional economic integration, the mainland, Hong Kong,

Macau, and Taiwan have concluded the CEPAs and the ECFA, respectively. The

CEPAs and the ECFA are not only RTAs under the WTO, but also administrative

agreements of China, which are unprecedented practices in the Multilateral Trading

System. The implementation of the CEPAs and the ECFA go smoothly, and have

been elevated to national policies of China, which will significantly promote the joint

economic prosperity and development of the mainland, Hong Kong, Macau, and

Taiwan.

Keywords

RTA, FTA, CEPA, ECFA, Customs Territories, WTO Rules

KFBJM2)3122*  81

* Associate Professor of International Law at Sun Yat-sen University, China. LL.D. (Xiamen). The author may be

contacted at: lzhang774@163.com / Address: School of Law, Sun Yat Sen University, Guangzhou, P.R. China, 510275.

This article is supported by the Fundamental Research Funds for the Central Universities.The author wishes to

thank Professor Eric Lee and other reviewers for their hard work on the draft paper. The views expressed herein

are, of course, those of the author alone.

I. Introduction

It is widely recognized that Regional Trade Agreements (RTAs) have become a very

prominent feature of the Multilateral Trading System. Traditionally, RTAs used to be

concluded by states. However, the newly concluded RTAs between different customs

territories of the Peoples Republic of China (China) are unprecedented. China

consists of four customs territories: the mainland, Hong Kong, Macau, and Taiwan, all

of which are independent members of the World Trade Organization (WTO). In order

to strengthen and promote regional economic integration, the mainland and Hong

Kong Closer Economic Partnership Arrangement (CEPA) was signed on June 29, 2003

and came into effect on January 1, 2004; the mainland and Macao Closer Economic

Partnership Arrangement (CEPA) was signed on October 18, 2003 and entered into

force on January 1, 2004; and the mainland and Taiwan Economic Cooperation

Framework Agreement (ECFA) was signed on June 29, 2010 and came into effect on

August 17, 2010.

This article tries to make a legal analysis of the unprecedented RTAs practices

among customs territories of China. This paper is composed of six parts. Part II

discusses the legal status of the mainland, Hong Kong, Macao, and Taiwan. Part III

deals with the contents of the CEPAs and the ECFA. Part IV analyzes the nature of the

CEPAs and the ECFA. Part V examines whether the CEPAs and the ECFA are

consistent with WTO rules. Part VI investigates the implementation of the CEPAs and

the ECFA. Finally, Part VII provides some brief conclusions.

II. Legal Status of the Four Customs Territories

A. They Are Part of China

Under the principle of One Country, Two Systems,

1

Hong Kong and Macau are

Special Administrative Regions (SAR) of China. As agreed by China and the United

Kingdom in the Sino-British Joint Declaration,

2

China regained sovereignty over Hong

82 

1Under the principle of one country, two systems,the socialist system and policies will not be practised in Hong

Kong and Macao.

See

the Basic Law of the Hong Kong Special Administrative Region (HKSAR Basic Law) pmbl.

(Apr. 4, 1994) and the Basic Law of the Macau Special Administrative Region (MSAR Basic Law) pmbl. (Mar. 31,

1993). For details,

see

F. C

HING,

H

ONG

K

ONG AND

C

HINA

:O

NE

C

OUNTRY,

T

WO

C

YSTEMS

(1996); E

RIC

Y.J. L

EE,

L

EGAL

I

SSUES OF

I

NTER

-K

OREAN

E

CONOMIC

C

OOPERATION UNDER THE

A

RMISTICE

S

YSTEM

243 (2002).

2The Sino-British Joint Declaration, formally known as the Joint Declaration of the Government of the United