Hong Kong’s free trade agreements
Expanding Hong Kong’s network of Free Trade Agreements
Mr CHAN Chun-ying referred to the 2018 Policy Address that the Administration had been exploring an FTA with the Pacific Alliance and had planned to seek accession to the Regional Comprehensive Economic Partnership (“RCEP”). As Hong Kong’s trade with the RCEP economies accounted for 74% of Hong Kong’s total trade, Mr CHAN considered it important to conclude the FTA with RCEP as soon as possible and asked about the progress of such negotiations. He also enquired about the estimated time for completing the FTA negotiations with the Pacific Alliance and the trade relationship between Hong Kong and the Pacific Alliance.
SCED advised that upon the signing of the FTA between Hong Kong and the Association of Southeast Asian Nations (“ASEAN”), the Administration had planned to seek accession to RCEP. Further progress was however pending the conclusion of negotiations of the FTA by ASEAN with the RCEP economies. The Pacific Alliance was now focused on its ongoing negotiations with other parties, and would give consideration to the assessment of new FTA partners upon conclusion of their current negotiations.
PSCIT added that the four members of the Pacific Alliance, namely Chile, Colombia, Mexico and Peru, accounted for nearly 40% of the gross domestic product of Latin America and were Hong Kong’s major trading partners in that part of the world. Chile, Colombia, Mexico and Peru were respectively the 34th, 45th, 22th and 49th largest trading partners of Hong Kong, accounting for 0.17%, 0.08%, 0.47% and 0.06% of Hong Kong’s total trade.
Mr CHAN Chun-ying enquired about to what extent Hong Kong had fulfilled the standard and the requirements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”), which had a very extensive coverage. The Deputy Chairman considered that Hong Kong’s accession to CPTPP had a symbolic meaning and would be conducive to Hong Kong’s international standing. He urged the Administration to try its best to seek accession to CPTPP as soon as possible.
SCED said that the Administration had an open mind on the accession to CPTPP as stated in the Administration’s paper submitted to the Panel for discussion at today’s meeting. The Administration would continue to forge bilateral and multilateral FTAs which would bring economic benefits to Hong Kong and on the condition that they were consistent with the World Trade Organization (“WTO”) rules. As Hong Kong was widely recognized as a liberal economy, a free trade practitioner and a staunch supporter of the multilateral trading system, the Administration did not consider the symbolic value of its accession to CPTPP was essential to Hong Kong’s international standing.
Progress of the implementation and enhancements of the Dedicated Fund on Branding, Upgrading and Domestic Sales
Cumulative funding ceilings
Mr CHAN Chun-ying enquired about the rationale for maintaining the proposed cumulative funding ceiling per enterprise at HK$1 million for the Mainland Programme whereas that for the FTA Programme would be increased by 100% from HK$1 million to HK$2 million.
USCED advised that under the FTA programme, the scope of the BUD Fund would be extended from the 10 AMS to include all economies with which Hong Kong had signed FTAs (8 FTAs covering 20 economies at present). Cross-region implementation of project measures within the geographical scope of the BUD Fund would also be allowed to provide flexibility to enterprises in devising measures that best suit their business plans. For example, an enterprise with production base located in the Mainland would be allowed to submit an application under the FTA programme and would enjoy the HK$2 million cumulative funding ceiling if it planned to develop business in the ASEAN market or any other market under the FTA programme.