ASEAN signs free trade pacts with Hong Kong
Despite Trump, Asia-Pacific forum sticks to free-trade gospel Agreements to take effect on Jan 1, 2019
MANILA: Hong Kong signed free trade and investment agreements with the 10-nation Association of Southeast Asian Nations yesterday, in what one of the Chinese territory’s officials called a “loud and clear” vote against rising regional trade protectionism.
The pacts, which conclude nearly three years of talks, are expected to take effect on January 1, 2019, at the earliest. They aim to bring “deeper and bolder” integration of market access with the bloc, said Edward Yau, Hong Kong’s commerce and development secretary. “In the face of protectionist sentiments in other parts of the world, these two agreements are in fact a loud and clear vote from all of us here for freer and more open trade,” Yau said. “Hong Kong, being a free trade promoter and advocate of a strong, rule-based, multilateral trading system, will continue to take this pathway, continue to do our utmost.”
Total merchandise trade between Hong Kong and ASEAN wasHK$833 billion ($107 billion) last year, official figures show. Total services trade was HK$121 billion in 2015. The ASEAN Hong Kong China Free Trade Agreement (AHKCFTA) was signed on the sidelines of a summit of the regional grouping in the Philippine capital of Manila.
It came after leaders attending an Asia-Pacific Economic Cooperation (APEC) summit in Vietnam agreed to tackle “unfair trade practices” and “marketdistorting subsidies” in a statement on Saturday that bore the imprint of US President Donald Trump’s efforts to reshape the global trade landscape.
That summit offered a contrast between the vision of Trump’s “America First” policy and the usual consensus favoring multinational deals that China now seeks to champion. Hong Kong has one of the world’s freest and most open economies, and the pacts will see many ASEAN countries gradually reduce or eliminate customs duties on Hong Kong goods. Professional services should also benefit, with increased investment flows, Yau said.
The partnership “will usher in greater trade synergies and more job opportunities for people and businesses in the region,” said Philippine Trade and Industry Secretary Ramon Lopez. Efforts to get an agreement on how to proceed without the US stumbled at the last moment, with leaders unable to formally endorse the proposal. But trade ministers announced a preliminary deal, with some details to be worked out later. Canadian Prime Minister Justin Trudeau told reporters that environmental protection, labor rights, gender issues and the auto industry were areas needing work, though he did not go into specifics.
“We got a lot of work done, but there is still more work to do,” Trudeau said. The revisions required for the 11 remaining TPP countries to continue talks required a difficult balance between high standards and pragmatism, said Japanese Economy Minister Toshimitsu Motegi.
“The substance is something all the TPP countries can agree on,” said Motegi. “This will send a very strong message to the US and the other countries in the region.” Trudeau said his unexpected absence from a TPP leaders’ meeting on Friday, which caused consternation among his fellow leaders and confusion about Canada’s stance, stemmed from an extra-long meeting with Japanese Prime Minister Shinzo Abe.
“We were not ready to close the TPP 11 yesterday,” he said. The ministers dropped some key provisions the Americans had required on protection of intellectual property, among others. They also changed the trade accord’s name to the unwieldy Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP. Those trade talks took place on the sidelines of APEC summitry: ceremonial arrivals in bright tailored shirts to a gala banquet, a closed-door retreat and scores of bilateral meetings between the 21 leaders attending the event in this coastal resort city. Increasingly, APEC summits have become more of an opportunity for such side talks, and for host nations to showcase their growing affluence. Trump’s dramatically different stances from his predecessor, Barack Obama - such as his “America First” trade strategy and his skepticism over climate change - were apparent in Danang. But his hosts and the other leaders took it in stride. — Agencies