HONG KONG: After three years of negotiations, ASEAN members and the Hong Kong Special Administrative Region (SAR) of China finally signed a Free Trade Agreement (FTA) on 12 November to increase economic cooperation between the two regions. Agreements signed included the ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA), and the ASEAN-Hong Kong Investment Agreement (AHKIA). The agreements will come into force on January 1, 2019.
Hong Kong is among the world’s freest and most open economies, and with its liberal tariff regime, the FTA aims in increasing the flow of goods and services from Hong Kong to the ASEAN countries. The agreement covers four major areas, namely tariff reduction for goods traded, reducing restrictions for trade in services, longer stay for business travelers, and better investment protection. With respect to trade reduction, most ASEAN states will eliminate or reduce custom duties on goods from Hong Kong.
On reducing trade restrictions, both parties have agreed to remove restrictions on foreign capital participation and the number of people employed. Thailand, Vietnam, and Philippines will also allow Hong Kong firms to take 50 percent or full ownership of firms.
On the issue of business travel, Hong Kong business visitors will be able to stay in an ASEAN country for 90 days. As of now, seven of the ASEAN member states allow Hong Kong travelers to stay for 14 to 30 days without a visa.
