Since last 9th of October, the first Free Trade Agreement that Hong Kong signs with a country out of Europe or Asia is in force. This agreement with Chile, which exports to Hong Kong last year reached $178 millions, will suppose to the Asian country a gateway to the South American region, expanding in this way it Free Trade Network to America.
Hong Kong signed the deal with Chile in 2012 at the Asia Pacific Economic Cooperation (APEC) summit in the Far Eastern Russian city of Vladivostok. Relating to the main points of the FTA, Chile has removed import tariffs on roughly 88 percent of scheduled items, and will eventually remove tariffs on an additional 10 percent of items through 2017. The remaining 2 percent of tariff lines to be left untouched represent national priority industries such as cereals or sugars, among others. On the other side, Hong Kong has committed to abolish tariffs on all goods originating from Chile, which will need to fulfil certain requirements to be authenticated as such.
Being both parties active members of the World Trade Organization, the agreement is fully consistent with provisions of this Organization. It incorporates chapters not only in goods and services, but also in customs cooperation, sanitary and phytosanitary measures, trade defence, and financial matters, among others. Furthermore, it importance goes beyond of its own scope, due to Chile and Hong Kong agreed that once the deal come into force they would begin negotiations in order to developed a comprehensive investment agreement with the purpose of promoting and protecting investments in both territories.
The agreement will help Hong Kong business top the Chilean market, which offers potential opportunities as an emerging market in itself; while for Chile, as the President of the DIRECON, from Chile’s Government Andres Rebolledo said, ”the agreement represents one of the most important milestones in the bilateral relationship, giving exporters and investors preferential access in many areas. We expect this will open relevant opportunities for Chile, for example, in financial in services”.
In conclusion, this agreement enhances the trade and economic relationships between Hong Kong and Chile and will bring positive impact to both economies in addition of the opportunities that it enhances to investors and exporters from both countries.