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Hong Kong Explains Its Free Trade Agreement Agenda

by Mary Swire,, Hong Kong

05 November 2015

Hong Kong's Secretary for Commerce and Economic Development, Gregory So, discussed the territory's free trade agreement strategy on November 4.

Answering a question before the Legislative Council, So stressed that the Government's primary goal is to enter into FTAs with its major services trading partners, as the services industry constitutes 93 percent of the city's gross domestic product.

Hong Kong's first trade treaty was signed with Mainland China, its largest services trading partner. Through the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), signed in 2003 and has been supplemented ten times, Hong Kong service suppliers can now access most services sectors in the Mainland.

So noted that Hong Kong is actively participating in the Trade in Services Agreement (TISA) negotiations between 23 participating economies, which commenced in 2013. Of these participants, eight are among the city's ten largest markets for services. Hong Kong's exports of financial services and business services to them account for 80 percent and 70 percent of total exports, respectively.

He also pointed to the commencement of FTA negotiations with the Association of South East Asian Nations (ASEAN) in July 2014. Collectively, the ten ASEAN member states are Hong Kong's fourth-largest trading partner for services. The Government's target is to conclude these negotiations next year.

So confirmed that the three trade deals will benefit 95 percent of Hong Kong's trade flows in services.

After the conclusion of the FTA negotiations with ASEAN, the Government will seek to join the Regional Comprehensive Economic Partnership (RCEP), currently being negotiated between ASEAN and its six FTA partners – the Mainland, Japan, South Korea, Australia, New Zealand, and India.

So also confirmed that the Government has been closely monitoring the development of regional FTAs, including the Trans-Pacific Partnership (TPP), the RCEP, and proposes for a pan-Asia Pacific Free Trade Area.

Replying to a question with regard to the TPP, he disclosed that the Government is "watching closely its development. … [However,] a concrete assessment of the impact of TPP on Hong Kong could only be possible after more information is made available."

TAGS: tax | business | free trade agreement (FTA) | trade treaty | China | agreements | Hong Kong | trade | Association of East Asian Nations (ASEAN) | services | Asia-Pacific

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