ASEAN-HKC China FTA and ASEAN-HKC Investment Agreements Concluded

KUALA LUMPUR, Sept 11 (Bernama) -- The Economic Ministers of ASEAN and Hong Kong, China (HKC) have announced the conclusion of the ASEAN-HKC Free Trade Agreement (AHKFTA) and the ASEAN-HKC Investment Agreement (AHKIA) at the Second ASEAN Economic Ministers (AEM)-HKC Consultations held on Sept 9, 2017 in Pasay City, Philippines. The negotiations for the AHKFTA and AHKIA commenced in July 2014 after the endorsement of the terms of reference for the ASEAN-HKC Trade Negotiation Committee (AHKTNC) and the scope and arrangements for the AHKFTA negotiations at the Second ASEAN Senior Economic Officials’ Meeting (SEOM)-HKC Consultations in April 2017. The AHKFTA covers trade in goods; rules of origin; customs procedures and trade facilitation; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; trade remedies; trade in services; economic and technical cooperation; intellectual property; and dispute settlement. Investment is covered in a separate agreement which is the AHKIA, taking into consideration HKC’s status as a Special Administrative Region, the Ministry of International Trade and Industry said in a statement Sunday. The economic and technical cooperation (ECOTECH) chapter in the AHKFTA would be implemented through an ECOTECH Work Programme, which would be adopted when the two agreements are signed at the margins of the 31st ASEAN Summit to be held in Pampanga, the Philippines in November 2017. HKC has committed HK$25 million (approximately US$3.2 million) over the period of five years to implement the ECOTECH Work Programme upon the entry into force of the AHKFTA. HKC was ASEAN’s sixth largest trading partner in 2016, with total merchandise trade of US$93.3 billion or 4.2 per cent of ASEAN’s total trade. Total foreign direct investments (FDIs) flow from HKC into ASEAN amounted to US$9.6 billion or 9.9 per cent of total FDIs into ASEAN in the same year. The statement also said HKC was Malaysia’s ninth largest trading partner in 2016 with total bilateral merchandise trade of US$12.1 billion or 3.4 per cent of Malaysia’s total trade. Meanwhile, total approved investments from HKC into Malaysia in 2016 amounted to US$59 million namely in basic and fabricated metal products; leather and leather products; wood and wood products; and machinery and equipment. HKC has committed to eliminate the customs duties on all originating goods from ASEAN under the AHKFTA. Furthermore, HKC has offered many improvements on the commitments that they have made under the General Agreement on Trade in Services (GATS) at the World Trade Organisation (WTO) among others in areas such as professional services; telecommunication services; distributive services; education services; environmental services; hospital services; entertainment and sporting services; transport services and spa services. HKC’s offer to ASEAN also included several sub-sectors that exceeded their offers in other existing FTAs such as veterinary services; services provided by midwives, nurses, physiotherapists and para medical personnel; education services; road transport services; and spa services. In addition, MITI said a side agreement between HKC, Brunei, Malaysia and Singapore would be established to maintain and acknowledge equal treatment to citizens and permanent residents of the four parties. The side Agreement, which was initiated by Malaysia, constituted an integral part of the AHKIA and enter into force between any two of the parties to this the agreement on the date on which the AHKIA enters into force between such parties. Malaysia has already benefited from the AHKFTA negotiations since its launch in July 2014 through the various joint activities undertaken together by MITI and SME Corp Malaysia together with HKC authorities. For instance, a large number of HKC officials and the private sector took part in the ASEAN SME Showcase and Conference 2015 held in May 2015 in Kuala Lumpur and the outreach programme on the Mainland and HKC Economic Partnership Agreement in Kuala Lumpur on Oct 5, 2016, as part of the Early Harvest of the AHKFTA. Malaysia has also invited HKC to participate in the 20th Small and Medium Enterprise (SME) Annual Showcase and Conference (SMIDEX) 2017 which will be held from Nov 15 to 17, 2017 at the Malaysian International Trade and Exhibition Centre in Kuala Lumpur. This will be the earliest deliverable under the recently concluded AHKFTA, said MITI. The realisation of the AHKFTA and AHKIA is crucial in strengthening ASEAN’s economic integration and stimulating development in the region as HKC is one of the world’s leading trade powerhouses. Furthermore, with ASEAN working towards extensive infrastructure development in the coming years under the ASEAN Master Plan on Connectivity and as the mega ‘One Belt One Road’ Initiative, there was a huge potential for ASEAN to attract investment opportunities from HKC, added MITI. -- BERNAMA