HONG KONG, Oct 18 (AP) -- Hong Kong was to announce Tuesday the third phase of a trade agreement that gives the city's companies greater access to markets in mainland China.

The free trade pact -- called the Closer Economic Partnership Arrangement, or CEPA -- waives import tariffs on some Hong Kong goods and grants the city's companies greater access to mainland markets.

Although Hong Kong returned to Chinese rule in 1997, the former British colony's products and companies are still treated as foreign under mainland Chinese law. CEPA is intended to address this disadvantage.

The first CEPA deal, signed in 2003, gave zero-tariff status to products in 374 tariff codes. A follow-up agreement in August 2004 expanded that to goods in another 713 tariff codes, including pharmaceuticals, textiles, clothing, food and beverages.

Hong Kong Financial Secretary Henry Tang was to announce the details of the third phase of CEPA later Tuesday, the government said.

Local media have reported that the CEPA expansion will give Hong Kong's watchmaking and legal industries greater access to the mainland market.