ASEAN Expected to Commence FTA Talks with Hong Kong
Jul. 23 – According to Hong Kong Secretary for Commerce and Economic Development Gregory So, the 10-nation ASEAN bloc and Hong Kong are expected to begin negotiations for a free trade agreement (FTA). This agreement would rapidly expand the volume of trade and investment between the two sides.
Currently in the preparatory stage, the agreement will seek to eliminate tariffs, liberalize trade in services, promote greater investment and to put in place a dispute settlement mechanism. According to figures from Hong Kong’s trade and industry department, ASEAN was Hong Kong’s second largest trading partner in 2012 after mainland China. Furthermore, five ASEAN countries (including Singapore, Thailand, Malaysia, Vietnam and the Philippines) were among Hong Kong’s top 20 trading partners in the same period.
Hong Kong originally requested to join the ASEAN-China FTA when it came into effect in 2010, yet ASEAN counter-proposed that it would bilaterally engage Hong Kong in a separate agreement.
“China has many tariff restrictions and other trade restrictions. Hong Kong is a more free trading area so to exchange benefits, the structure of the deal has to be different and that is something which has to be worked out on a win-win basis,” said Singaporean Prime Minister Lee Hsien Loong.
According to a statement, Hong Kong’s government will gauge the interests of its businesses to determine if breaking into the ASEAN market is desirable. An FTA with ASEAN would likely be more beneficial for Hong Kong since the city already imposes zero duties and tariffs on most of its trade activities.
An FTA with ASEAN would also prepare the way for Hong Kong to join the Regional Comprehensive Economic Partnership (RCEP). This ASEAN-initiated partnership seeks to consolidate all of ASEAN’s existing FTAs into a single agreement, effectively creating one of the largest free trade areas in the world.
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