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ASEAN/Hong Kong: Negotiations Concluded on Free Trade and Investment Agreements

(Oct. 13, 2017) On September 9, 2017, Hong Kong and the Association of Southeast Asian Nations (ASEAN) announced that they had concluded negotiations on a Free Trade Agreement (FTA) and a related Investment Agreement. (Press Release, Hong Kong and ASEAN Conclude Free Trade Agreement Negotiations, Trade and Industry Department of the Government of the Hong Kong Special Administrative Region website (Sept. 9, 2017).) The two parties will sign the agreements in November. (Id.) ASEAN’s ten Member States include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar (also known as Burma), the Philippines, Singapore, Thailand, and Vietnam. (ASEAN Member States, ASEAN website (last visited Oct. 10, 2017).)

According to Edward Yau, Hong Kong’s Secretary for Commerce and Economic Development, who co-chaired the meeting at which the announcement was made, “[t]he Agreements are comprehensive in scope and the commitments therein … [encompass] trade in goods, trade in service, investment, economic and technical co-operation and [a] dispute settlement mechanism. The FTA will become effective after completion of the necessary procedures.” (Hong Kong and ASEAN Conclude Free Trade Agreement Negotiations, supra.) Yau noted that in 2016 ASEAN was Hong Kong’s second largest trading partner in merchandise trade and in 2015 its fourth largest trading partner in services trade. (Id.) He added that the two new agreements would bring to Hong Kong “more and better access to the ASEAN markets, create new business opportunities and further enhance trade and investment flows.” (Id.)

The negotiations on the FTA began in July 2014 and concluded in July of this year. (Id.) In 2016 Hong Kong and ASEAN conducted merchandise trade amounting to HK$833 billion (about US$107 billion), and in 2015 the total trade in services trade between the two sides was HK$121 billion (about US$16 billion). (Id.) In regard to investment, at the end of 2015 “ASEAN ranked sixth among Hong Kong’s destinations of outward direct investment, with a stock of HK$218 billion, and … sixth among Hong Kong’s sources of inward direct investment, with a stock of HK$555 billion” (about US$28 billion and US$71 billion, respectively). (Id.)