“The entry into force of this free trade agreement is an important outcome that further improves trade flows between ASEAN and Hong Kong,” said His Excellency Dato`Lim Jock Hoi, ASEAN Secretary-General. “It also reflects ASEAN and Hong Kong`s support for a rules-based international trading system and indicates our commitment to strengthening trade and investment relations among our nations,” His Excellency added. The implementation of AHKFTA will enable Vietnam to further improve its network of competitive trade agreements. It will continue to help the economy shift the export value chain from low-tech manufacturing to the export of high-tech goods such as electronics, machinery, vehicles and medical equipment. On 12 November 27, 2017, the Association of Southeast Asian Nations (ASEAN) and the Hong Kong Special Administrative Region of China signed a free trade and investment pact aimed at strengthening economic cooperation between the two regions and boosting economic development. The two agreements, ASEAN-Hong Kong, china Free Trade Agreement (AHKFTA) and ASEAN-Hong Kong Investment Agreement (AHKIA), were signed at the 31st ASEAN Summit in Manila and will enter into force on 1 January 2019. Investment Agreement Annex Agreement with Brunei Darussalam, Malaysia and Singapore Annex Agreement with Singapore In order to reduce trade restrictions, both sides agreed to lift restrictions on participation in foreign capital and the number of persons employed. Thailand, Vietnam and the Philippines will also allow Hong Kong companies to take 50 percent or full ownership of businesses. To date, only seven of the ten ASEAN countries allow business travelers from Hong Kong to stay in the country for up to 14 to 30 days without a visa.
The free trade agreement allows hong Kong business travelers to stay up to 90 days in any ASEAN country without a commercial visa. Five years into its birth, the AHKFTA on Tuesday began reducing and removing tariffs in Laos, Myanmar, Singapore, Thailand and Vietnam for imports from Hong Kong. Bilateral investment agreements with the five countries will enter into force on Monday under the ASEAN-Hong Kong Investment Agreement (AHKIA). With regard to trade restrictions, Hong Kong and ASEAN countries will remove barriers to the participation of foreign capital and the number of foreign workers employed. Foreign companies can significantly benefit from AHKFTA, as the agreement will extend Hong Kong`s network to all major Southeast Asian economies. Since all ASEAN member countries are also economies along China`s Belt and Road Initiative (BRI), the closer relationship between Hong Kong and ASEAN will help foreign companies exploit the BRI`s trade opportunities. The agreement covers four main areas, namely the reduction of tariffs on traded goods, the removal of restrictions on trade in services, extended stays for business travellers and better investment protection. In terms of reducing trade, most ASEAN countries will eliminate or reduce tariffs on goods from Hong Kong.
Under the AHKFTA, Hong Kong and Singapore grant duty-free access and bind their duties to zero upon entry into force of the agreement. Brunei Darussalam, Malaysia, Philippines and Thailand will remove tariffs on 85% of products traded with Hong Kong within ten years and further reduce 10% of customs lines in 14 years. Indonesia and Vietnam will remove tariffs on 75% of their products within ten years and further reduce 10% of customs lines in 14 years.