Hong Kong to Sign Free Trade Agreement with ASEAN
May. 2 – Leaders of the Association of Southeast Asian Nations (ASEAN), who recently met in Brunei, are set to approve a decision by their economic ministers to expand trade ties with Hong Kong through the signing of a free trade agreement (FTA). The ASEAN nations of Singapore, Thailand, Malaysia, Vietnam and the Philippines are currently among Hong Kong’s top 20 trading partners.
A draft statement by ASEAN senior officials welcomes the decision of the ASEAN economic ministers to pursue greater economic ties with Hong Kong through an FTA.
“We welcomed the decision of the ASEAN economic ministers to pursue closer economic engagement with Hong Kong through an ASEAN-Hong Kong Free Trade Agreement,” said the statement.
Figures from the territory’s trade and industry department website show that ASEAN was Hong Kong’s second largest trading partner in 2011 after mainland China. Hong Kong’s bilateral trade with ASEAN in 2012 was US$94.1 billion, up 43 percent from 2009.
For Hong Kong businesses, increasing trade with ASEAN is ideal. Figures estimate that there are more than 130 million middle-class individuals in ASEAN member states. With a reasonable amount of disposable income, they are willing to splash their income on fashionable consumer goods. Due to this, in 2012, Hong Kong exported consumer goods worth a total value of US$6.44 billion to ASEAN countries, an increase of 3 percent and 20 percent compared to 2011 and 2010 respectively.
Dickson Ho, the Hong Kong Trade Development Council’s principal economist of Asian and emerging markets, said that clothing and accessories are some of the key contributors to Hong Kong’s trade with ASEAN. Hong Kong’s total exports of clothing and clothing accessories to the ASEAN bloc in 2012 was worth US$753 million, up by 1.5 percent compared to 2011.
Ho added that it is electronic goods that are at the top of the list of Hong Kong’s most traded products. Hong Kong’s total export value of electronic products to ASEAN in 2012 was US$15.32 billion, an increase of 3.7 percent compared to 2011. Hong Kong’s imports of electronic products from ASEAN in 2012 was US$44.526 billion, a gain of 0.5 percent.
For technical details regarding Hong Kong’s current agreements with ASEAN member states, please explore our Tax Treaties Resource Library.