On May 13, Sir Leon Brittan, Vice President of the European Commission, arrived in Hong Kong for a one-day visit during which he signed a historic customs cooperation agreement between the European Union and the Hong Kong Special Administrative Region (SAR).

The accord was the first binding agreement on customs cooperation entered into by Hong Kong since the handover of the territory to the Peoples Republic of China in 1997. Under Article 151 of the Basic Law, the SAR's constitution, Hong Kong may conclude and implement its own trade and economic agreements with foreign states and organizations. "This is a vivid demonstration of the fact that the 'one country, two systems' policy is a living reality," said Sir Leon. "The European Union is fully committed to supporting that policy and Hong Kong's competence in the international trade field as guaranteed under the Basic Law."

The agreement is more than merely symbolic: "It is also of considerable practical importance, enabling Europe and Hong Kong to work together more effectively in combatting fraud, CD piracy and other forms of illegality," said Sir Leon. It will facilitate the exchange of information and coordination between the customs authorities of Hong Kong and the EU's Member States, giving them the tools to more effectively enforce customs rules. "It demonstrates the strong commitment of both sides to enhancing cooperation in customs matters," said SAR Financial Secretary Donald Tsang Yam-kuen, who signed the agreement with Sir Leon. "It also underlines the close economic ties between the SAR and the EU."

During his visit Sir Leon also met with key government officials, including Chief Executive Tung Chee-hwa, Chief Secretary for Administration Anson Chan Fan On-sang, President of the Legislative Council Rita Fan and Secretary for Trade and Industry Brian Chau Tak-hay. Sir Leon said that he was optimistic about Hong Kong's economic recovery, remarking that an expectation of economic growth by the end of the year was now a realistic proposition.

Meeting the press several times during the day, Sir Leon was repeatedly questioned about whether the accidental bombing of the Chinese embassy in Belgrade during the Kosovo conflict would affect negotiations for China's accession to the World Trade Organisation (WTO). Although in the wake of the bombing the second EU-China summit, scheduled for May 13, was postponed by mutual consent, Sir Leon emphasised that WTO negotiations were ongoing despite the tragedy and need not be unduly affected. "China has always stressed that politics and economics should not be mixed," he said. "There is no need for the economic interests of China to be jeopardised."

During the previous week Sir Leon himself made a two-day trip to Beijing from May 5-6 to give added impetus to the WTO negotiations. Meeting with China's Prime Minister Zhu Rongji, Sir Leon stressed that getting China into the WTO before the end of this year remained a major strategic objective for both the EU and the United States and that China's accession to the global trading organisation presented no political problem for the EU. Sir Leon welcomed progress made by China and the U.S. during recent talks in Washington and said that the EU was now keen to move that progress forward. Sir Leon also met with China's Foreign Minister Tang Jiaxuan and continued in-depth discussions over the WTO with Minister for Foreign Trade Shi Guangsheng. Following Sir Leon's visit the EU's chief negotiator on China's WTO accession, Gˇrard Depayre, and a team of EU experts flew to Beijing for a new round of talks.

Vice President of the European Commission Sir Leon Brittan and Financial Secretary of the Hong Kong Special Administrative Region Mr. Donald Tsang at the signing ceremony on 13 May 1999.

Chief Executive Tung Chee-hwa and Sir Leon Brittan in Hong Kong on 13 May 1999. Hong Kong Government

11 May 1999 "Five Months of the Euro : What Does It Mean for Business in Hong Kong?" Seminar organised by the EU representatives in Hong Kong, the Hong Kong Trade Development Council, the Macau Institute for European Studies and the Hong Kong Monetary Authority. From left : Mr. Diego Menarin, Managing Director of Benetton (Far East) Limited, Mr. Jonathan Butterfield, Executive Vice President of Global Transaction Services of ABM Amro Bank, Mr. Tony Latter, Deputy Chief Executive of the HK Monetary Authority, Mr. Juan Victor Monfort, First Counsellor of the EC Office, Dr. Hans-Joachim Klockeres, Head of Monetary Policy Division of the European Central Bank and Professor Peter Bofinger, Dean of the Economic Faculty at the University of Wurzburg, Germany.