Hong Kong and Australia have successfully concluded negotiations on a free trade agreement (FTA) and a new investment agreement (IA) on November 15 2018. The FTA and the IA negotiations between Hong Kong and Australia commenced in May 2017, bringing the 18-month negotiation to a close.
Given recent global trade tensions, the Hong Kong-Australia FTA and IA mark a milestone in the development of the substantial bilateral trade and investment relationship between the two jurisdictions.
The FTA and IA, when signed, will cover trade in goods and services, investment and other related areas, and will boost the flow of trade and services between Hong Kong and Australia. This will enhance the competitiveness of Hong Kong exports in the Australian market and promote Hong Kong's competitiveness as an investment jurisdiction.
The main objectives for Hong Kong launching the FTA negotiations were to:
- Ensure zero tariffs for Hong Kong products sold into the Australian market; and
- Secure for Hong Kong service providers the best FTA commitments that Australia has to offer.
Currently, Hong Kong has FTA arrangements with mainland China, New Zealand, Iceland, Liechtenstein, Norway, Switzerland, Chile, Macao, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam and Georgia. Hong Kong has also concluded negotiations with the Maldives. This brings the total number of FTA arrangements with Hong Kong to 21.
Hong Kong also has 20 existing IA arrangements with Australia, Austria, Belgium, Luxembourg, Canada, Chile, Denmark, Finland, France, Germany, Italy, Japan, Republic of Korea, Kuwait, the Netherlands, New Zealand, Sweden, Switzerland, Thailand and the UK.
In addition, Hong Kong has 17 treaty arrangements with investment provisions with Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, China, Chile, Iceland, Liechtenstein, Norway, Switzerland and New Zealand.
The Hong Kong FTA and IA with Australia will foster and strengthen bilateral ties between both countries. It will provide certainty for Hong Kong corporations doing business in Australia as well as providing better access to the Australian market for Hong Kong exporters of education, as well as financial and professional services.
The details of Hong Kong and Australia's FTA and IA will be released when both countries sign the agreements in the first half of 2019.
FTAs are typically accompanied by a comprehensive double taxation agreement and we hope this will be the case with Australia.