Under the terms of Friday's agreement, 273 types of products from Macao, including garments, jewellery and some electronic goods, will be fully exempt from tariffs when exported to the mainland starting from January 1, 2004, said Commerce Vice-Minister An Min at a press conference. The 273 types of products account for 93 percent of Macao's exports to the mainland.

The zero-tariff privilege will be extended to all goods made in the Macao Special Administrative Region (MSAR) by January 2006, he said.

Eighty of the mainland's service sectors, including banking, insurance and tourism, will open up further to the MSAR's companies.

The pact also covers trade and investment facilitation.

The mainland and Macao also agreed to strengthen cooperation in tourism, financial services and the recognition of professional qualifications.

Six annexes to the pact were also signed on Friday.

The Mainland-Macao Closer Economic Partnership Arrangement (CEPA) aims to eliminate the policy barriers in economic cooperation between the two locations.

It will strengthen Macao's role as an investment platform and intermediary and push its economic diversity.

The most important outcome of the pact for Macao is its greater access to a huge market. It is now up to businesses to decide how to grasp the opportunity, said Francis Tam, the MSAR's secretary for economics and finance.

The mainland imported US$142 million worth of goods from Macao and exported US$876 million to the MSAR last year.

CEPA negotiations were launched on June 20 and the signing of the pact came after a mainland-HKSAR CEPA was signed on June 29.

The mainland-Macao CEPA shares the same principles as the Hong Kong agreement and fully reflects the features of Macao's economy with some minor differences in content, An said.

For example, the 273 types of products entitled for initial zero-tariff treatment are not all the same under the two pacts.

Vice-President Zeng Qinghong and the Chief Executive of Macao SAR, Ho Hau-wah, witnessed the signing of the CEPA.