The European Union (EU) has sought stronger cooperation with Hong Kong and Macao. The European Commission (EC) announced this yesterday in the EC's formal Communication entitled: "The European Union, Hong Kong and Macao: possibilities for cooperation 2007-13".

The communication was passed by the EU on October 26 and officially announced in Hong Kong yesterday. It sets a number of objectives for cooperation in seven areas: trade and customs, finance, people-to-people links, transport, the environment, health, and food safety.

Improved coordination on multilateral relationship between the EU and Hong Kong, especially under the framework of the WTO, is on the top of the agenda since it helps promote trade relationships between EU and China.

Stronger customs cooperation on intellectual property rights is another priority as the EU will consider programmes to disseminate and explain measures on regulations, standards, custom procedures and other related matters.

"It's one of the areas where we would like to see improvement," said Thomas Roe, Head of Office of the European Commission in Hong Kong. "Hong Kong has worked hard in fighting IPR violations in recent years, but it remains the source of some 8 per cent of all recorded violations in the EU."

Another area for improvement is the absence of competition policy in Hong Kong, as many European companies complain about the lack of a level playing field in certain key sectors.

Regarding the possible changes in the taxation system in Hong Kong in the future, Roe said he was confident that it will not affect EU's cooperation with Hong Kong in tax matters.

Efficient government

"The Hong Kong government is highly efficient in managing its taxation and we're not worried at all. We believe it won't affect our trading either, even if a goods and service tax is introduced," he said. The communication also states other objectives for increased exchanges between EU and Hong Kong, such as a more substantial visitors programme that should be built on the existing European Union Visitors Programme (EUVP).

Joint efforts are also underway to conclude agreements at community level with Hong Kong and Macao, which would restore legal certainty for air carriers on each side under existing bilateral agreements.

"This would represent an important first step in developing closer cooperation between the EU and Hong Kong and Macao in civil aviation. Border areas of cooperation, including technical, industrial and regulatory cooperation, should also be explored," Roe said. In response to the EC's Commission, a government spokesperson welcomed the EC proposal to enhance cooperation and development of closer ties between EU and Hong Kong in trade, economic and other areas.

"We will continue to enhance understanding and cooperation with the EC. For instance, we will continue to strengthen customs cooperation on IPR. This includes measures to combat copyright infringement and counterfeit activities."

Talking about cooperation on tax matters, the spokesperson remarked that the SAR government was committed to pursuing effective exchange of information within the ambit of bilateral comprehensive double taxation agreements.

"We are vigilant in combating tax avoidance and evasion, and we support international cooperation on this front by improving transparency and the exchange of information in accordance with our legislation."