A free trade agreement between ASEAN and Hong Kong will reinforce the latter’s role as the premier gateway into and out of Mainland China, boosting trade and investment across Asia and the world including ASEAN.
A day after announcing the signing of the ASEAN-Hong Kong Free Trade Agreement (AHKFTA) in November in Manila, ASEAN Economic Ministers chairman and Philippine Trade Secretary Ramon Lopez discussed the elements covered by said agreement during the ASEAN-Hong Kong Business Conference on 12 July.
“We are hopeful for greater trade and business opportunities with AHKFTA in place, reinforcing Hong Kong as the key gateway to China,” said Sec. Lopez.
Aside from the FTA, also for signing in November at the sidelines of the 31st ASEAN Summit is an investment agreement between both sides.
The AHKFTA covers elements related to trade in goods and related issues such as tariffs, rules of origin, non-tariff measures, customs procedures and trade facilitation, trade remedies, technical barriers to trade, and sanitary and phytosanitary measures.
It also touches on trade in services; investment; intellectual property rights; dispute settlement; horizontal and institutional issues; economic and technical cooperation; and other areas of interest to be mutually agreed upon.
In 2015, Hong Kong was ASEAN’s 7th largest trading partner. While ASEAN was Hong Kong’s 2nd largest trading partner, after China for the same year.
Total merchandise trade between ASEAN and Hong Kong amounted to HKD 823.3B or US$ 106.1B. This amount represents 10.8% of Hong Kong’s global merchandise trade in 2015, registering an annual average growth rate of 3.2% per annum between 2011 and 2015.
To date, there are more than 500 ASEAN companies in Hong Kong, including regional headquarters, regional offices and local offices. They account for 6.6% of the total number of foreign companies in Hong Kong.
In this regard, the trade chief encouraged businessmen from ASEAN Member States (AMS) and Hong Kong to continue partnering with ASEAN, particularly with the Philippines, which currently experiences economic resurgence with strong macroeconomic fundamentals and high investors’ confidence.
With the instrument in place, the Filipino business community can expect broader trade engagements with their Hong Kong counterparts.
In 2016, Hong Kong was the Philippines’ 5th trading partner, 3rd top export market, and 10th import supplier with total bilateral trade valued at US$9.11B in 2016. In terms of investments, Hong Kong ranked as the 15th source of IPA (investment promotion agencies)-approved investments in the Philippines.
“Hong Kong is a viable target market for Philippine consumer goods and brands, with Hong Kong serving as a gateway to the China market by providing other economies with a venue for marketing their goods to Mainland China consumers,” Sec. Lopez said.
In addition, Hong Kong hosts an estimated 60 million tourists a year, of which 40 million are from the Mainland. Such fits with the initial assessment of the Philippine Export Marketing Bureau that the Philippines can promote products in Hong Kong, including jewelry and design-driven products like luxury furniture, home furnishings, decors and fashion accessories, according to the trade chief.
With regard to services, both sides are exploring cooperation to develop education services, computer and related services, professional services and other business services, all of which are of interest to the Philippines.
Sec. Lopez also shared that ASEAN continues to make strides towards integrating the region into the global economy through its active FTAs with dialogue partners China, Japan, Korea, India, Australia, and New Zealand.