ASEAN is Hong Kong’s second largest merchandise trading partner and the fourth in services trade.
The Agreements are significant and comprehensive, as evident by the extensive scope of fourteen chapters and commitments that spread across 4,000 pages. The commitments will bring legal certainty, better market access, and fair and equitable trade and investment opportunities. These will bring about new business opportunities and boost our trade and investment flows.
The FTA also has a chapter on economic and technical co-operation which aims to enhance the benefits of the agreement with capacity building and technical assistance.
With these Agreements in place, Hong Kong encourages and expects to see more ASEAN enterprises to trade with and invest in the city. 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. These include a simple and low tax regime, high-quality services, a skilled and talented workforce with global vision, and free ow of information and capital.
The signing of the Agreements is just a start. From now on, Hong Kong and the ASEAN member states will have ample opportunities to meet and review the trade and investment opportunities as well as initiatives with a view to promoting even deeper and broader economic integration as well as social integration.
ASEAN Member States (AMS) have agreed to progressively eliminate or reduce their customs duties on goods originating from Hong Kong. Individual AMS has made the following commitments:
- Singapore commits to binding all its customs duties at zero, with effect from the date on which the FTA enters into force for Singapore;
- Brunei Darussalam, Malaysia, the Philippines and Thailand will eliminate customs duties of about
85 per cent of their tariff lines within 10 years and reduce customs duties of about another 10 per cent of their tariff lines within 14 years;
- Indonesia and Vietnam will eliminate customs duties of about 75 per cent of their tarffi lines within 10 years and reduce customs duties of about another 10 per cent of their tariff lines within 14 years; and
- Cambodia, Laos and Myanmar will eliminate customs duties of about 65 per cent of their tariff lines within
15 years and reduce customs duties of about another 20 per cent of their tariff lines within 20 years.
- Brunei Darussalam will grant tariff free access to articles of apparel and clothing accessories originating from Hong Kong within three years, while Thailand will eliminate custom duties of watches and clocks and their accessories originating from Hong Kong within three years.
- Hong Kong exporters who comply with the relevant preferential origin rules and fulfill the relevant requirements can benefit from the preferential tariff treatment for exports to AMS.
- Hong Kong commits to granting tariff free access to all products originating from AMS when the FTA takes effect.
- In similar circumstances, service providers of both sides will enjoy national treatment i.e. being treated equally with local service providers of the other party; and
- The two sides commit to removing or reducing various restrictions, including on types of legal entity, foreign capital participation, number of service providers or operations, value of service transactions, and number of persons employed, etc. For example, Thailand, the Philippines and Vietnam allow Hong Kong enterprises to have foreign capital participation of up to 50 per cent or even full ownership in many sectors.
- In respect of arrangements for temporary stay and entry for business purposes, AMS will provide facilitation to various extent to Hong Kong service providers. For instance, there are commitments of temporary stay of up to 90 days in general for Hong Kong business visitors, as well as a stay of no more than two years (and extendable for another two years) in general for intra-corporate transferees.
- In addition, the commitments of Malaysia and Vietnam also extend to other categories, i.e. independent specialists/experts/professionals and contractual services suppliers.
- Hong Kong also makes commitments to AMS on a wide range of service sectors.