SAR forges trade deals with ASEANBusiness | Samantha Wong 13 Nov 2017
Hong Kong and the Association of Southeast Asian Nations yesterday signed a free trade agreement and a related investment agreement in Manila, providing for the removal or progressive reduction of customs duties on goods from the SAR that will enter ASEAN member countries.
The agreements, which are expected to come into force on January 1, 2019, will provide Hong Kong goods and services better access to the Southeast Asian market. The deals will also protect Hong Kong investments.
Under the agreements, Singapore has committed zero customs duties on goods originating from Hong Kong.
Brunei, Malaysia, the Philippines and Thailand have also agreed to eliminate within 10 years customs duties on about 85 per cent of their tariff duties on goods from Hong Kong. Within 14 years, another 10 per cent of their tariff duties will also be abolished.
On trade in services, Thailand, the Philippines and Vietnam will allow Hong Kong firms to take 50 percent or even full ownership of companies in different industry sectors in ASEAN member countries.
Secretary for Commerce and Economic Development Edward Yau Tang- wah said Hong Kong export trading firms can benefit from the progressive reduction of duties in terms of lower operational costs and improved market competitiveness.
Bilateral merchandise trade between Hong Kong and the ASEAN trading bloc grew by an average of 3.4 per cent every year between 2012 and 2016. ASEAN was Hong Kong's second largest trading partner in merchandise trade in 2016, with the total merchandise trade amounting to HK$833 billion.
The average annual growth of trade in services of Hong Kong with the ASEAN bloc was 3.1 per cent from 2011 to 2015. ASEAN was Hong Kong's fourth largest trading partner in services trade in 2015, with total services trade that year at HK$121 billion.
Yau also said that "with these agreements in place, I encourage and expect to see more ASEAN enterprises to trade with and invest in Hong Kong. Being one of the world's freest economies buttressed by the rule of law and an independent judiciary, Hong Kong has many fundamental strengths that have stood the test of time."
"We also have a simple and low tax regime, high-quality services, a skilled and talented workforce with global vision, and free flow of information and capital," he added.