The spice trade forms the fragrant background to Portugal's centuries-old trade links with the region. Between the late 15th century and early 16th century, the Portuguese opened up sea routes to the East in their search for spices and other trade after they were unable to break the firm grip the Venetians had on commerce with Alexandria. Eventually, the Portuguese established outposts in farflung India and Malaysia, from Goa to Malacca, and from West Africa to China. All this depended upon sea power. At one point, the Portuguese virtually dominated the spice trade with the spice islands of Ceylon (modern-day Sri Lanka) and Indonesia. 'Portugal was possibly the first European country to come to this region,' says Dr Joao Paulo Matos Sequeira, Portugal's consul-general in Hong Kong. Macau, established after the Portuguese helped to clear the surrounding seas of some of the pirates terrorising the area, became a stepping stone and base for operations in the mainland. The enclave became a centre of trade in the Far East, a place where Western and Eastern cultures met and blended, the consul-general says. Macau also became a centre of Christianity. The enclave's Basilica de Sao Paulo embodied Christianity in the East. Portugal established a virtual monopoly on trade with China and Japan, with her merchants acting as middlemen because Chinese merchants were ostensibly forbidden to travel abroad. Today, Macau and Hong Kong complement each other, says the consul-general. With the growing importance of the Pearl River Delta, the region has an opportunity to play a significant economic role, Mr Matos Sequeira says. 'Hong Kong will be turning to the delta. The synergies are important, whether in environment, trade or business,' he says. Mr Matos Sequeira also sees Shanghai as having a complementary role, serving the northeast mainland and Hong Kong in the south. It may seem an unusual move, at a time when the region's future seems bright, for Lisbon to decide to end Portugal's 106-year-old diplomatic presence in Hong Kong. The consulate is due to be closed possibly by the end of summer. Mr Matos Sequeira says there will still be an official Portuguese presence, but its exact form has yet to be determined. He believes a liaison bureau of sorts will take care of business needs. In future, while regular matters may have to be dealt with through Portugal's Macau consulate, urgent matters arising in Hong Kong, and any official business of people unable to make it to Macau, will continue to be dealt with locally. The consul-general, however, is more eager to talk about what will remain after the consulate's closure. He says the Portuguese-language programme at The University of Hong Kong (HKU) is expanding, and cultural promotions are being planned. The consul-general says about 70 students are enrolled for the HKU's Portuguese language courses. Meanwhile, Portugal's educators are strengthening ties with HKU and other universities here. The Macau-based Portuguese Institute of the Orient will soon sign an agreement with HKU to expand teaching and academic exchange and to promote Portuguese culture. Meanwhile, Club Lusitano, a centre for social activities relating to the local Portuguese community, will continue as usual. Mr Matos Sequeira believes the club may take on other duties, relating to culture, economics and finance. He says the mainland will always be important and Portugal wants to be in at the ground floor. 'Portuguese business will want to be part of the development in the area,' Mr Matos Sequeira says. Hong Kong's trade with Portugal is in shoes and leather goods, cork, wines and foodstuffs (such as the sardines Portugal is famous for). But there is scope for more business. 'Until 2001, bilateral trade between Hong Kong and Portugal was going up. But from 2002, it began a downward slide,' the consul-general says. 'We hope these figures can be boosted for 2002 and 2003.' Two-way trade between Hong Kong and Portugal dropped 6 per cent last year to US$179.78 million from US$191.28 million in 2001. A member of the European Union, Portugal is committed to enlarging the EU's membership. The country is interested in playing an active role in European affairs. 'We are a small country, but we want to play an active role in the union,' Mr Matos Sequeira says.