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The Hong Kong, China - Australia Free Trade Agreement (FTA) and Investment Agreement, signed on 26 March 2019, marked a milestone in bilateral trade and investment relationship between Hong Kong and Australia. The commitments made to each other far exceeded their World Trade Organization commitments, enabling goods, services and investments from the two places to enter each other’s market under more preferential terms. |
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The two Agreements were signed by Hong Kong’s Secretary for Commerce and Economic Development, Mr Edward Yau, and Australian Minister for Trade, Tourism and Investment, Mr Simon Birmingham, in Sydney, Australia. |
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The two Agreements are comprehensive in scope, covering trade in goods, trade in services, investment, intellectual property, government procurement, competition and other related areas; and are modern and of high standard. They provide Hong Kong traders and investors with legal certainty and more favourable access to the Australian market, whilst creating more business opportunities and enhancing trade and investment flows between the two places. |
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Against the prevailing uncertainties in the global economic environment, the two bilateral Agreements provided high transparency and predictability for trade and investment and gave a big boost of confidence to the rule-based trading system. |
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The FTA and the Investment Agreement negotiations between Hong Kong and Australia commenced in May 2017 and concluded in November 2018. The FTA with Australia is the fourth FTA that the current term of the Hong Kong Special Administrative Region Government has signed with its trading partners since taking office in July 2017. |
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Highlights of the benefits to Hong Kong under the two Agreements include: |
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For Services and Service Providers |
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Some 140 services sectors to benefit from specific commitments made by Australia. In these committed sectors, Hong Kong service providers enjoy, subject to the terms of this FTA, market access, including the right to establish business in Australia to provide services; treatment no less favourable than local service providers under like circumstances; and any additional liberalisation measures which Australia offers to other economies under its future Free Trade Agreements (FTAs) |
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Liberalisation commitments made exclusively for Hong Kong in rail transport services and arbitration, conciliation and mediation services; and |
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Tariff-free for all Hong Kong originating goods. |
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For Manufacturers and Exporters |
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Tariff-free entry into the Australian market for all Hong Kong originating goods; |
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Simple procedures to claim zero import tariffs – Hong Kong exporters, Hong Kong producers or the Australian importers can make self-declaration of origin for their Hong Kong originating products; and |
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Expedited and simplified customs clearance procedures |
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For Business Travellers |
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Business travel facilitated – Business visitors, Intra-corporate transferees (ICT), Independent executives (IE) and Dependants of ICT and IE will be granted temporary entry into Australia, subject to relevant immigration requirements. |
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For Investors |
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Enjoy better access to the Australian market as thresholds for investment screening have been raised; and |
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Receive comprehensive investment protection under a new Investment Agreement with a certain and transparent dispute settlement mechanism. |
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Other Highlights |
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Ensure Hong Kong suppliers’ access to the Australian government procurement market; |
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Promote competition and ensure effective protection of intellectual property rights; and |
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Transparent mechanism for consultations and settlement of disputes under the FTA. |
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Highlights of the benefits to Australia under the two Agreements include: |
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Goods |
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Hong Kong does not currently apply tariffs to goods imported from Australia, but until now has had the right to do so under the World Trade Organization (WTO) Agreement.The FTA provides: |
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reciprocal elimination of import tariffs, giving certainty for Australian exporters that Hong Kong will continue to provide duty-free entry; |
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streamlined wine labelling requirements, with a commitment to improve transparency of regulations; and |
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a mechanism to enhance collaboration between regulators, and to facilitate speedy resolution should consignments of perishable goods be delayed at the border. |
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Services |
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The FTA secures guaranteed access across priority service sectors into Hong Kong’s significant and growing international services market, and provides cutting-edge rules to address impediments to trade for Australian services suppliers operating in Hong Kong with a physical presence, or virtually. The FTA provides: |
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guaranteed access for Australian suppliers of financial, professional accounting, engineering and construction, education, transport and logistics services;
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guaranteed access for Australian lawyers to provide legal advice on Australian and international law on a cross-border basis; |
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streamlined establishment requirements for Australian banks seeking to establish in Hong Kong as fully incorporated banks; |
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mechanisms to work towards mutual recognition of professional qualifications and registration; |
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enhanced cooperation between educational institutions and relevant government agencies in the areas of quality assurance, recognition of qualifications, online education, distance education and blended learning models; and, |
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guaranteed temporary entry to Hong Kong for Australian professionals including intra-corporate transferees (and their spouses and dependants), installers and servicers and business visitors. |
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E-commerce |
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Delivering rules to ensure vibrant digital economic links between Australia and Hong Kong was a significant priority for this Agreement. For the first time with any trading partner, Hong Kong has committed to free cross-border data flows (without mandatory local data storage requirements). This outcome enhances Hong Kong’s reputation as an e-commerce hub, and provides Australian business, including SMEs, with guaranteed competitive reach into the East Asian region. |
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Investment |
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The FTA will promote two-way investment flows between Australia and Hong Kong, and help attract vital capital into new and existing industries in Australia. The Investment Agreement contains rules to protect the substantial investments in each other’s economies from discriminatory practices or expropriation. |
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Improving the Business Environment |
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The FTA and Investment Agreement will also support the competitiveness of Australian commercial interests by improving transparency and providing more certainty to doing business. Highlights include: |
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intellectual property rules building on the WTO Agreement on Trade-Related Aspects of Intellectual Property; |
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a commitment to maintain legal regimes that target anti-competitive business practices; and enforce consumer protection in Australian and Hong Kong markets; and |
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rules ensuring advance publication and impartial administration of all laws, regulations and procedures related to commitments made under the FTA. |
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The FTA and the Investment Agreement will take effect after Hong Kong and Australia have completed their respective internal procedures. Full details of the two Agreements are available from the dedicated webpages of Hong Kong’s Trade and Industry Department. |
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