Hong Kong and Chile sign Free Trade Agreement (with photos/video)

     Hong Kong and Chile signed a bilateral Free Trade Agreement (the Agreement) today (September 7), marking a new milestone in the furtherance of trade and investment co-operation between the two economies.

     The Financial Secretary, Mr John C Tsang, the President of Chile, Mr Sebastián Piñera and other guests witnessed the signing of the Agreement by the Secretary for Commerce and Economic Development, Mr Gregory So, and the Minister of Foreign Affairs of Chile, Mr Alfredo Moreno at a signing ceremony held in Vladivostok, Russia.

     Speaking at the ceremony, Mr Tsang noted that Chile is a close and valued trading partner of Hong Kong. Both are strong advocates and practitioners of free and open trade and investment, and have been working side by side in numerous international fora, including the World Trade Organization and Asia-Pacific Economic Cooperation.

     "The Free Trade Agreement signed today will further strengthen our partnership and serve as a platform to take our bilateral economic relations to a new level, offering a wealth of opportunities for our businesses as well as investors," Mr Tsang said.

     He added that the Agreement is comprehensive and of high quality, encompassing trade in goods and services, investment, and other trade related areas. Traders and investors of both sides can enjoy preferential access to our respective markets.

     Following are the key features of the Agreement:

- On trade in goods, for goods originating from Hong Kong, Chile will abolish import tariffs on around 88 per cent of its tariff lines, and will phase out the tariffs on an additional 10 per cent over three years.

- On trade in services, Hong Kong service providers will enjoy legal certainty in market access and national treatment for a comprehensive range of services in the Chilean market.

- On investment, Hong Kong investors will have legal certainty on national treatment in respect of their investments in specified non-services sectors in Chile. To enhance investment flows between the two economies, Hong Kong and Chile agreed to further negotiate a more comprehensive agreement on investment promotion and protection.

- The Agreement also contains provisions to promote competition, facilitate access to each other's government procurement market, enhance co-operation in customs procedures and protect the environment. Under the Agreement, Hong Kong and Chile will co-operate in the areas of sanitary and phytosanitary measures and technical barriers to trade, with the objective of reducing trade barriers and facilitating bilateral trade as far as possible.

     The Agreement will provide Hong Kong with better access to the Chilean market, which may potentially serve as a gateway to the Central and South American markets. It will create more business opportunities beneficial to Hong Kong's long-term economic growth. It will also further strengthen Hong Kong's position as an international trade, commerce and investment centre.

     Apart from direct economic benefits, the Agreement also carries significant strategic value for Hong Kong. It will expand Hong Kongˇ¦s free trade agreement network to the American region, in addition to our existing linkage with the Asia-Pacific and European regions through our free trade agreements with Mainland China, New Zealand and European Free Trade Association Member States (Iceland, Liechtenstein, Norway and Switzerland).

     The Agreement will enter into force on a date to be mutually determined by Hong Kong and Chile after completing necessary domestic procedures.

     Total merchandise trade between Hong Kong and Chile was HK$7,058 million in 2011 while total service trade was HK$950 million in 2010. On trade in goods, Chile ranked 29th among Hong Kong's worldwide trading partners and fourth among those in Latin America in 2011. On trade in services, Chile ranked 32nd among Hong Kong's worldwide trading partners and fourth among those in Latin America in 2010.

     Details of the Agreement, including its full text, will be uploaded to the Trade and Industry Department's website at www.tid.gov.hk.

Ends/Friday, September 7, 2012
Issued at HKT 17:20