This free trade agreement opens a new chapter in the economic relationship between Australia and Hong Kong. The trade deal gives Australian companies more security for trade and investment activities in Hong Kong. It also reaffirms the value Australia attaches to the high level of autonomy enjoyed by Hong Kong through the ”one country, two systems” framework. The agreement with Hong Kong does not require certification for access to preferential tariffs in Australia. However, importers must establish that they are in possession of a written confirmation that the goods concerned comply with the relevant rules of origin. It may be desirable to obtain an origin declaration from the exporter or manufacturer to support the use of the free trade agreement to reduce or eliminate tariffs. The agreement ensures secure access to Australian providers of educational, vocational, financial, transport, construction, tourism and leisure services – these are the best commitments Hong Kong has ever offered to an FTA partner. Modern trade rules for e-commerce, financial services, telecommunications and intellectual property will also provide regulatory certainty for Australian businesses and the confidence to make long-term investment decisions. Free trade agreements provide a mechanism to facilitate trade in goods. Each agreement contains information and links to relevant legislation, policies and opinions on rules of origin and access to preferential tariffs.
To reap the benefits of the new agreement, many Australian organisations need to develop a deeper understanding of Hong Kong`s diverse market and corporate culture, as well as the skills and capabilities needed to develop effective partnerships. Mukund Narayanamurti, CEO of Asialink Business, says the Australia-Hong Kong Free Trade Agreement has the potential to offer strong benefits to companies looking to capitalize on the region`s growing markets and reach Hong Kong`s affluent population. ”The Australia-Hong Kong Free Trade Agreement will support Australia`s relationship with one of our strongest trading partners and complement our existing free trade agreement with China. Hong Kong is an established international gateway, and this trade deal will help Australian companies go global and enter other markets in Asia and beyond,” he said. In 2018-2019, Hong Kong was Australia`s tenth largest destination for goods exports ($8 billion) and seventh largest services export market ($3 billion). Hong Kong was our fifth largest source of total foreign investment, with a stock of $118.8 billion at the end of 2018. Hong Kong was our eleventh largest target for total investment in Australia, with a portfolio of $52 billion at the end of 2018. The Australia-Hong Kong Free Trade Agreement has entered into force and other free trade agreements with Peru and Indonesia are expected to enter into force shortly.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that acts as a coordinating body for a network of independent member firms. KPMG International does not provide audit or other client services. These services are provided exclusively by member firms in their respective geographical areas. KPMG International and its member firms are legally distinct and distinct entities. They are not, and nothing herein, should be construed as placing such entities in the relationship of parent companies, subsidiaries, agents, partners or joint ventures. No member firm has the power (real, obvious, implied or otherwise) to bind kpmg International or any member firm in any way. The information contained herein is of a general nature and is not intended to respond to the situation of any particular person or entity. While we strive to provide accurate and timely information, there can be no assurance that such information will be accurate at the time of receipt or that it will continue to be accurate in the future.
No one should act on the basis of such information without the advice of an appropriate professional after a thorough examination of the situation in question. For more information, please contact KPMG`s Federal Tax Legislative and Regulatory Services Group at: +1 202 533 4366, 1801 K Street NW, Washington, DC 20006. Australia is a valuable trading partner of Hong Kong. It was our 7th largest services trading partner in 2018, with total services trade between the two sides of HK$47 billion and our 20th largest goods trading partner in 2019, with total goods trade of HK$50 billion. Each of these agreements will bring benefits to Australian importers, including reduced tariffs on a wide range of products. The agreements will deepen economic cooperation between Australia and its counterparts, enhance the security of trade with these countries and, in the case of Peru, expand opportunities for Australian exporters in the Latin American region. With regard to the Agreement with Peru, a certificate of origin is required to receive preferential treatment. However, unlike the rules of many Australian free trade agreements, this certificate can be completed by the exporter or manufacturer and does not require the approval of an authorized body. Australia`s legislation – the Growing Australian Export Opportunities Across The Asia-Pacific (2019) – will enact the implementation of Australia`s latest free trade agreements with Hong Kong, Peru and Indonesia. Finally, Australian importers will be able to benefit from a new round of tariff reductions under the China-Australia Free Trade Agreement from 1 January 2020.
The agreements are broad in scope and the obligations they contain are of high quality and include trade in goods, trade in services, investment, government procurement, intellectual property, competition, the dispute settlement mechanism and other related areas. They will provide traders and investors in Hong Kong with legal certainty and cheaper access to the Australian market, create more business opportunities and improve trade and investment flows between Hong Kong and Australia. Hong Kong is already a destination of choice for Australian businesses due to its strategic location as a gateway to China and North Asian markets. The new agreement will provide new opportunities to strengthen Australia`s already important trade and investment ties between Australia and Hong Kong. Australian farmers, fish farmers and winegrowers should benefit from the new agreement. .