Hong Kong in talks with Australia for first free trade deal
Australia wants Hong Kong to guarantee the city will maintain its current zero tariff treatment for Australian goods
Hong Kong began negotiations with Australia for the first ever free trade agreement between the two sides on Tuesday.
Representatives were keen to appear amicable as Australian Minister for Trade Steven Ciobo was joined by Greg So Kam-leung, secretary for commerce and economic development, while launching the trade talks at the China Club.
Australia wants Hong Kong to guarantee the city will maintain its current zero tariff treatment for Australian goods, while Hong Kong wants Australia to reduce its 2.5 per cent average import fee, as well as allow better access for the city’s service industries to Australia.
So said he hopes an agreement can be concluded this year, though he is unlikely to be the minister signing the deal, amid rumours that he will not be in the cabinet of the next chief executive, Carrie Lam Cheng Yuet-ngor.
So also “declared his interest”, saying his daughter is in Australia and he has three grandchildren in the country.
He said the free trade deal is very important for both sides, because it will bring an even more open goods and services trade. “There are also other opportunities in the region that we want more cooperation with Australia, including the Guangdong Bay area and the ‘Belt and Road Initiative’.”
Ciobo said the deal under negotiation is not specifically about the Belt and Road plan, but reaching a deal will, in the long term, contribute to the initiative, and allows companies to be benefit from it.
Peter Shiu Ka-fai, the lawmaker for the retail and wholesale sector, welcomed more trade with Australia, but added: “Hong Kong is already very liberal for Australian businesses, we would like to see Australia to do more to facilitate Hong Kong companies that want to do business there, such as reducing tariffs or non-tariff barriers.”
Hong Kong is conducting a public consultation on the plan until 27 May.
Australia already has a free trade agreement with China, while its current trade relationship with Hong Kong is governed by a World Trade Organisation deal.
But in reality, Hong Kong is currently offering terms that are far more liberal than the WTO arrangement, and Australia wants a deal with the city to make sure such conditions remain.
“Free trade is in Hong Kong’s DNA,” said Stephen Ng Tin-hoi, chairman of the Hong Kong General Chamber of Commerce. “We always support free trade agreements. We don’t ask why we are having this, we only ask why we are not having more,” he said.
Professor Richard Petty, chairman of the Australia Chamber of Commerce, said : “Hong Kong’s economy is 93 per cent services so we see enormous opportunity for Australian service providers who are actively engaged in banking, tourism, and retailing and other areas to benefit from this initiative.”