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Hong Kong and 3 ASEAN Member States Enter into the Free Trade Agreement
From June 11, 2019, Hong Kong and three ASEAN member states, Myanmar, Singapore and Thailand will enter into force of the Free Trade Agreement. The rest of the seven ASEAN members, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, the Philippines and Vietnam are anticipated to follow in due course.
With the implementation of the FTA, Hong Kong service providers will benefit hugely from the commitments under trade in services. There will be better opportunities and legal certainty for market sectors such as professional services, business services, telecommunications services, construction and related engineering services, educational services, financial services, tourism and travel related services, transport services and arbitration services. All of which Hong Kong’s strong sectors or have potential for development.
For trade in goods, many customs duties on goods originating from Hong Kong, including jewellery, articles of apparel and clothing accessories, watches and clocks and toys, will either be progressively eliminated or reduced in Myanmar and Thailand, while in Singapore they will be completely reduced to zero. To enjoy the preferential tariff treatment, Hong Kong traders must comply with the relevant preferential rules of origin and fulfil the related requirements. The Trade and Industry Department (TID) or Government Approved Certification Organizations of Hong Kong process applications for these certificates of origins.
Upon the notification of Hong Kong and four ASEAN member states to the ASEAN Secretariat of their ratification of the FTA, the FTA will enter into force officially for these five signatories. However, their rights and obligations under the FTA will be suspended until the signatories concerned have separately notified the ASEAN Secretariat of their ratification of the IA. Out of the remaining seven ASEAN states, six have not ratified the FTA, except for Vietnam, which has ratified the FTA but not the IA. There are no solid plans for Vietnam to implement the FTA for the time being.
Hong Kong and ASEAN signed the FTA and an Investment Agreement (IA) at the end of 2017.
For more information on the FTA, please refer to the TID website. Would you like to set up a company in Hong Kong and benefit from its unique position being part of China, but still with its own judiciary and financial system? Contact us now.