Deal done: ASEAN-Hong Kong FTA a ‘vote for open trade’

Deal done: ASEAN-Hong Kong FTA a ‘vote for open trade’

13/11/17

Luke Foddy, Communications Manager

The conclusion of the ASEAN-Hong Kong free trade agreement yesterday (12 November) is being described as rejection of protectionism in the region.

The ASEAN-Hong Kong China Free Trade Agreement was signed during the ASEAN summit in Manila on Sunday, along with a separate investment deal.

Hong Kong, which is not covered by the current FTA between China and ASEAN, stands to reap considerable rewards from greater access to South East Asia, according to Dr Jonathan Choi, Chairman of the Chinese General Chamber of Commerce.

Dr Choi, who will be speaking at Asia House’s upcoming conference in Hong Kong, Asia Trade in the New Global Order, on 27 November, told XinhuaNet that the FTA will: ‘open the door to the big market of Southeast Asia for Hong Kong, creating enormous opportunity in trade and investment.’

“Freer and more open trade”

Meanwhile, Hong Kong’s commerce and development secretary, Edward Yau, is quoted by Reuters as saying: “In the face of protectionist sentiments in other parts of the world, these two agreements are in fact a loud and clear vote from all of us here for freer and more open trade.”

The reception has been equally warm in ASEAN, with Philippine Trade and Industry Secretary Ramon Lopez stating: “The agreements create opportunities for ASEAN because they will ensure greater access to both trade and investment.”

He added that the deals will create opportunities for micro, small and medium enterprises in ASEAN countries to increase their presence in Hong Kong, according to the Jakarta Post.

Incentives to invest in Malaysia

The FTA is also likely to attract more investment to Malaysia, the Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said in a press conference today.

“With the FTA in place, many incentives will be offered by the Ministry of International Trade and Industry and the Malaysian Investment Development Authority to encourage more Hong Kong investors to invest in Malaysia,” he said.

According to Malaysia’s Sun Daily, the FTA will not only mark the beginning of ‘great business ties between Hong Kong and Asean countries’ but will also ‘make Hong Kong an export hub for Malaysian products into China and other countries.’

Total foreign direct investment flows from Hong Kong to ASEAN amounted to US$9.9 billion in 2016, up from US$4.1 billion in 2015, according to Channel News Asia, which reports the FTA ‘is aimed at eliminating or reducing tariffs, liberalising trade and services, and establishing rules to promote confidence in trade.’