Australia and Hong Kong pen a Free Trade Agreement and Investment Agreement
The signing of the Australia- Hong Kong Free Trade Agreement and Investment Agreement, on 26 March 2019 in Sydney, marked a significant development in the already close economic engagement between Australia and Hong Kong.
After two years of talks, Australian and Hong Kong negotiators brokered a comprehensive deal that ensures our sophisticated trade and investment relationship will continue to thrive well into the future.
Australia and Hong Kong are already longstanding partners with deep economic and cultural links, and a shared commitment to free trade.
Between us, we traded $18.8 billion of goods and services in 2017-18.
As Australia's Consul-General to Hong Kong and Macau, Michaela Browning, notes:
"Hong Kong is Australia's leading business base in Asia, reflecting the unique advantages of the 'One Country, Two Systems' framework, with Hong Kong enjoying a high degree of autonomy."
"It is a leading financial and business centre in the region, Australia's fifth largest source of investment, and a platform market to showcase Australia's premium goods and services to Asia and the world."
Under current arrangements, our substantial trading relationship is governed by World Trade Organization (WTO) rules, while our investment relationship is governed by a bilateral investment agreement from 1993.
The new set of agreements contain modern rules under which to conduct trade and investment between our two economies. This includes for contemporary trade areas not captured under WTO rules, such as digital trade and e-commerce.
For exporters of goods and services, the deal provides stability and predictability for business in the face of global trade headwinds. Australia and Hong Kong have agreed to lock in zero tariff levels upon entry into force. Australian service suppliers will also have guaranteed access into key sectors of Hong Kong's growing services market, including professional and financial services.
The deal provides mechanisms to facilitate Australia's food and wine exports to Hong Kong, valued at $1.4 billion in 2017-18.
Once the FTA comes into force, Australia will have FTAs with seven of its top eight export markets for goods and services.
The Agreements will also add to the suite of Australian trade deals in the region, and provides the basis upon which Australian businesses can grow in the Hong Kong market.
In addition to the FTA and Investment Agreement, Australia is pursuing initiatives in innovation, technology, and infrastructure to deepen economic ties with Hong Kong.
For example, Austrade's newly established Australia-Hong Kong Tech Bridge program will help Australian businesses identify and seize new commercial opportunities in Hong Kong.
The Authorised Economic Operator Mutual Recognition Arrangement provides Accredited Australian Trusted Traders exporting to Hong Kong a more streamlined customs process.
The Australian Government will unite to work with Australia's Chambers of Commerce, Southern China, Hong Kong and Macau to identify and develop commercial opportunities appointments arising from the Greater Bay Area Initiative.
"The Australia Hong Kong Free Trade Agreement (AHKFTA) is a forward looking agreement that strengthens the commercial ties between Australia and Hong Kong by preparing both economies for the future of business. The free trade agreement focuses hugely on driving innovation, technology, intellectual property, and the collaboration of infrastructures, these initiatives will certainly complement the development of the Greater Bay Area. Furthermore, the AHKFTA manifested a common aspiration shared between Australia and Hong Kong, that is, the hope of enhancing the efficiency of trades, goods, and services. I congratulate both government administrations on successfully signing the AHKFTA on 26 March 2019 in Sydney."
Roy Lo FCPA (Aust.)
2019 Divisional President - Greater China, CPA Australia