HONG KONG: Hong Kong has signed a landmark free trade deal with the Association of Southeast Asian Nations (ASEAN), in a move the city’s commerce secretary says could further integrate Hong Kong into China’s Belt and Road initiative.
The free trade agreement, along with a related investment agreement, was signed on Sunday in the Philippines by representatives from Hong Kong and the 10 member states of the association.
The agreement covers tariff reductions for Hong Kong exports, as well as a dispute settlement mechanism.
“All ASEAN member states are also economies along the Belt & Road,” said Edward Yau, Hong Kong’s Secretary for Commerce and Economic Development, in an official statement by the Hong Kong government. The deals will “cater for our strategy to tap the business opportunities offered by the Belt and Road Initiative,” Yau said.
Singapore, Hong Kong’s biggest trading partner in ASEAN, will commit to keeping its customs duties on Hong Kong goods at zero. Other ASEAN countries pledged to reduce customs duties for certain tariff lines over the next decade. In return, Hong Kong will allow tariff-free access for all products originating from ASEAN member states.
The deal, which was negotiated over three years and is still “subject to the completion of necessary procedures,” could come into effect as early as 2019, according to the statement.
The Special Administrative Region has lately been expanding its participation in China’s Belt and Road initiative, launched by President Xi Jinping in 2013 to promote international trade links.
In January, then-Chief Executive Leung Chun-ying announced the expansion of Hong Kong’s Belt and Road office. In September, commerce chief Yau said at a summit that Hong Kong would prioritize bilateral trade agreements with Belt and Road countries. A cooperation agreement between Hong Kong and China’s National Development and Reform Commission is also in the works.
The ASEAN member states are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
