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Australia-Hong Kong Free Trade Agreement (A-HKFTA) – overview of second negotiating round, Hong Kong, 1-5 August

The second round of Australia-Hong Kong Free Trade Agreement (FTA) negotiations was held in Hong Kong from 1-5 August 2017. The Australian delegation was led by the Department of Foreign Affairs and Trade (DFAT) and included representatives of the Departments of: Agriculture and Water Resources; Attorney-General's; Finance; Industry, Innovation and Science; Immigration and Border Protection (Hong Kong-based); and Treasury. The Hong Kong delegation was led by the Trade and Industry Department and included representatives from the Departments of Justice and Customs and Excise.

Substantial progress was made during this round, building upon the positive trajectory established during the first round, and the work undertaken intersessionally. Officials engaged in the first round of market access discussions.

The third round will be held in Melbourne, 10-14 October. Negotiators will continue working intersessionally.

Goods

Negotiators were able agree to the majority of articles in the trade in goods, technical barriers to trade, customs procedures and trade facilitation and sanitary and phytosanitary measures chapters. Potential sectoral annexes to reduce non-tariff barriers (NTBs) and facilitate trade for wine and food products were discussed. Negotiations on rules of origin were also productive, with agreement reached on a number of articles and Parties agreeing to follow up outstanding issues intersessionally. The Parties had discussed market access requests in preparation for the next round.

Services and Investment

Services negotiations made good progress, with both Parties agreeing to obligations that show their strong commitment to ambitious outcomes across all services chapters. The chapters on cross-border trade in services, financial services, telecommunications, electronic commerce and movement of natural persons all advanced with further discussions planned intersessionally on outstanding issues.

Australia and Hong Kong continued to move forward discussions on the investment obligations, taking into account requirements on both sides. Building on the regular interaction between the two sides since the first round of negotiations, we were able to provisionally agree on a large number of elements of the investment obligations. We continued to emphasise Australia's requirement to modernise the investment rules currently in force with Hong Kong as contained in the 1993 Agreement between Australia and Hong Kong for the Promotion and Protection of Investments.

The services and investment teams also had detailed initial discussions on market access and anticipate further detailed discussions at the next round.

Legal, Institutional and Other Issues

Positive progress was made across all areas of the dispute settlement chapter, as well as on the institutional chapter and framework provisions. Australia and Hong Kong also held productive discussions on chapters such as Competition Policy and State-owned Enterprises, Government Procurement and Transparency and SMEs. Negotiations on the Intellectual Property chapter, held separately, also made good progress.

An extensive list of issues requiring follow up for all chapters were identified for consideration between negotiating sessions.

Stakeholder input

We continue to welcome input from stakeholders on issues of relevance to the Australia-Hong Kong FTA negotiations. To provide input, or to make a submission, please email a-hkfta@dfat.gov.au.

Overview of first A-HKFTA negotiating round, Canberra, 31 May–3 June

The first round of A-HKFTA negotiations was held in Canberra from 31 May-3 June 2017. The Australian delegation was led by the Department of Foreign Affairs and Trade (DFAT) and included representatives of the Departments of: Agriculture and Water Resources; Attorney-General’s; Communications and the Arts; Education; Finance; Health; Employment; Immigration and Border Protection; Industry, Innovation and Science; IP Australia; Prime Minister and Cabinet; and Treasury. The Hong Kong delegation was led by the Trade and Industry Department and included representatives from the Departments of Justice and Intellectual Property.

Solid progress was made, with officials engaging constructively across all areas of the negotiations. Collaborative discussions facilitated a greater understanding of each other’s objectives and positions, ensuring future negotiating rounds can be as productive as possible.

Australia and Hong Kong are both committed to an FTA that deepens trade and economic liberalisation between our two economies, and furthers our cooperation more broadly.

The second round is scheduled to be held in Hong Kong from 1-6 August 2017. Negotiators have agreed to continue working together to resolve outstanding issues intersessionally.

Goods

Sound progress was made in the negotiations on goods chapters, including on the rules of origin, technical barriers to trade, customs procedures and trade facilitation and sanitary and phytosanitary measures chapters. We agreed to establish mechanisms that will help to address any non-tariff barriers (NTBs) for exporters as they may arise. Both Parties agreed to consider each other’s proposals on various aspects of the text. Australia and Hong Kong agreed to provide further information and clarification on respective processes within their own economies, and follow up with other internal Government agencies on outstanding issues, as appropriate.

Services and investment

Discussions were held on services and investment chapters, with progress being made in a number areas of benefit to both economies. While discussions were preliminary, they were productive. Texts were tabled in advance of the first round and a number of elements were agreed in the early stage of negotiations.

Positive steps were made in negotiations on cross-border trade in services (CBTS), with both Parties voicing their commitment to strong outcomes across all services chapters. In addition to CBTS, negotiations were held on financial services, electronic commerce and movement of natural persons texts, with work on telecommunications taking place intersessionally.

Strong progress was made on the discussion of investment obligations. We emphasised our intent to modernise the investment rules currently in force with Hong Kong as contained in the 1993 Agreement between Australia and Hong Kong for the Promotion and Protection of Investments.

Discussions in the next round will focus on advancing the texts and pursuing ambitious market access outcomes.

Legal, institutional and other issues

Significant progress was made across all areas of the dispute settlement chapter, including broad agreement on a panellist code of conduct annex. Positive progress was also made on the institutional chapter and framework provisions. Australia and Hong Kong also held productive discussions on “Other Issues” chapters such as Intellectual Property, Competition Policy and State-owned Enterprises, Government Procurement and Transparency and SMEs, with issues requiring follow up identified for consideration between negotiating sessions.

Launch of A-HKFTA negotiations

On 16 May, Minister Ciobo launched negotiations in Hong Kong with his counterpart, Mr Gregory So Kam-leung, Secretary for Commerce and Economic Development.

Last Updated: 9 October 2017

Hong Kong market snapshot

  • GDP USD 332.3 billion (2017)
  • GDP growth: 2.4% (2017)
  • Population: 7.4 million (2016)
  • Two-way trade: $16.3 billion (2016)

Email:
a-hkfta@dfat.gov.au

Mail:
Australia-Hong Kong Free Trade Agreement
Office of Trade Negotiations
Department of Foreign Affairs and Trade
RG Casey Building
John McEwen Crescent
Barton ACT 0221

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