On November 15, Australia and Hong Kong signed a Declaration of Intent signifying the successful conclusion of negotiations on the Australia-Hong Kong Free Trade Agreement (FTA) and an Investment Agreement. Australian Minister for Trade, Tourism and Investment, Simon Birmingham, and Hong Kong’s Secretary for Commerce and Economic Development, Edward Yau finalized the deal on the sidelines of 30th Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting in Port Moresby, Papua New Guinea.

The negotiations for the FTA and Investment Agreement began in 2017. The agreements aim to expand existing market access between the two regions, and mark a significant milestone in the two regions’ history of fruitful trade relationships.

According to the Australian Department of Foreign Affairs and Trade, in 2017 Australia was Hong Kong’s seventeenth largest export destination and twelfth largest import source. In that year, the two way trade in merchandise and services between the two regions amounted to A$ 18.76 billion.

Mutual benefits of FTA

Yau, in the joint statement issued after the talks, emphasized that Australia is already a significant trading partner of Hong Kong and that these agreements are meant to strengthen their bilateral trade and investment relationship with Australia.

The agreements cover trade processes in merchandise, services, investment and other related areas with legal certainty. In addition to the added benefit of duty free imports of Hong Kong goods in Australian markets, once the agreement enters into force, Australia will reap the benefit of zero tariffs on all exports to Hong Kong, thereby strengthening its agricultural, seafood, beef and pork, and winemaking industries.

The FTA and Investment Agreement will also open the floodgates for Australian investments in Hong Kong. They will provide regulatory certainty for Australian businesses through enhanced and modern trading norms for e-commerce, financial services, telecommunications, and intellectual property. Additionally, the deal ensures a guaranteed certainty of access for the Australian suppliers of education, professional, financial, transport, construction, tourism, and recreational services in the Hong Kong services sector. Both regions anticipate greater market access.

Next steps

After ratification of this agreement, Hong Kong will secure a free flow of goods with as many as nineteen nations and Australia will have FTAs with seven of its top eight export markets for goods and services.  Hong Kong and Australia are expected to ratify these agreements in their respective legislative bodies in the early half of 2019.

If you want to learn more about the Australia-Hong Kong FTA, read the Government of Hong Kong’s press release or Australia’s Minister for Trade, Tourism and Investment press release.