Hong Kong is one of my many favourite destinations for doing business. Although I have been there many times, I am excited about going to Hong Kong again to promote Australia – NSW – Hong Kong business and investment opportunities, joining a NSW government roadshow. The AHKFTA is a hot topic for discussion in Australia at the moment with our Australian government seeking submissions via the DFAT website.
Australia and Hong Kong launched negotiations for a free trade agreement (FTA) on 16 May.
Hong Kong is a Special Administrative Region of the People’s Republic of China, and is able to enter into its own trade agreements.
An Australia-Hong Kong FTA (A-HKFTA) would complement our FTA with China and further integrate the Australian economy with Asia.
Hong Kong was Australia’s twelfth largest trading partner overall in 2015-16, with total two-way trade in goods and services worth $15.3 billion.
Hong Kong is an attractive export destination for Australia. Australian goods exports to Hong Kong were worth $8.9 billion in 2015-16, growing at 21.2 per cent between 2010-11 and 2015-16.
The Australian services export market to Hong Kong was worth $2.4 billion in 2015-16, and grew at a rate of 13.2 per cent between 2014-15 and 2015-16.
Hong Kong is our fifth largest source of total foreign investment, with a stock of $100.9 billion at the end of 2016, and our tenth largest destination for total Australian investment, with a stock of $52.9 billion at the end of 2016.
Why is the Government negotiating an FTA with Hong Kong?
A strong relationship with Hong Kong is in Australia’s long-term strategic interests and concluding an FTA would strengthen Australia’s relationship with one of its most significant trading partners.
Until the launch of the A-HKFTA on 16 May, aside from the European Union, Hong Kong was the largest trading partner with which Australia had not launched or concluded FTA negotiations.
Hong Kong is Australia’s leading business base in East Asia, with over 600 Australian businesses, including the four major banks, having a major presence there.
An FTA would provide increased certainty for Australian service providers and investors.
It could lock in continued access to the Hong Kong market for Australian exporters of education, financial and professional services.
It could guarantee that Hong Kong could not apply tariffs to Australian goods exports in the future.
Australia is seeking a comprehensive FTA that meets the needs of Australian goods and services exporters, and investors.
For goods exporters, Australia could seek a commitment that Hong Kong would continue its zero tariffs levels on Australian goods exports. By addressing non-tariff barriers and customs procedures, we could aim to ensure that goods trade with Hong Kong operates as smoothly and simply as possible.
For services suppliers, Australia could seek to secure non-discriminatory access to the Hong Kong market, create greater regulatory certainty and automatically capture future unilateral liberalisation.
Australia could also seek to address a range of issues impacting on trade, including:
- digital trade (e.g. e-commerce);
- protection of intellectual property;
- temporary entry of business people;
- government procurement; and
- competition policy.
For investors, Australia could seek outcomes which protect investments, while at the same time, incorporate safeguards to ensure the Government could regulate for legitimate public welfare reasons, including public health and national security measures.
At this moment, DFAT is seeking submissions about the FTA. Go to the DFAT website for more information.