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
SUMMARY

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 ... (see full summary)

 
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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 Peoples 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

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