The agreements cover a general scope and cover trade in goods, trade in services, investment, economic and technical cooperation, the dispute settlement mechanism and other related areas. The agreements will provide legal certainty, better market access and fair and equitable treatment of trade and investment, creating new business opportunities and further strengthening trade and investment flows between Hong Kong and ASEAN. In order to reduce trade restrictions, both parties agreed to lift restrictions on foreign participation and the number of employees. Thailand, Vietnam and the Philippines will also allow Hong Kong companies to buy back 50 percent or full corporate ownership. The agreement covers four main areas: reducing tariffs on trade in goods, reducing restrictions on trade in services, extending the stay of business travellers and better protection of investment. In terms of trade reduction, most ASEAN countries will eliminate or reduce tariffs on goods from Hong Kong. The RCEP will require the ratification of 6 of the 10 ASEAN member states and 3 of the five ASEAN-FTA partners for the agreement to enter into force. Therefore, the timing of implementation depends on the internal processes for ratification of the agreement by RCEP partners. The fact that the four best ports of Asean and mainland China are no coincidence. Of course, there are other reasons for this dynamic, but Singapore, which is a largely service-based economy, has placed itself at the centre of intra-Asian trade as a trade hub for China-related trade – Hong Kong`s traditional role. From 2018, ASEAN will be Hong Kong`s second largest trading partner in goods trade and fourth in services trade. Hong Kong`s total exports to ASEAN increased by 7.3 per cent over the previous year to $2.8 billion, while imports were $73 billion, an increase of 20.1 per cent over the previous year.
Given that China has been ASEAN`s largest trading partner since 2009, trade is expected to continue to grow as Hong Kong is increasingly re-exported. In addition to increasing the number of goods traded, the Free Trade Agreement and The Investment Agreement (AE) will encourage the services sector in ASEAN countries to use Hong Kong`s professional, financial, commercial and legal services. The region will also benefit from increased investment flows, particularly in the real estate, manufacturing and services sectors. Unfortunately, there are no details yet on the agreements, but for Hong Kong, the devil is certainly in the details. Vietnam is Hong Kong`s third largest trading partner and ASEAN`s largest export market. In the first five months of 2019, Hong Kong accounted for 30.4% of Vietnam`s total FDI investment, or $5.08 billion. 4 Technical barriers to trade include technical rules, standards and compliance assessment procedures that may have a direct or indirect impact on merchandise trade. The implementation of the free trade agreement between Hong Kong and asean countries should not immediately alter relative trade flows via Singapore or Hong Kong. Finally, Singapore retains its position as home port for major carrier alliances, virtually guaranteeing that this Entrepot trade will continue in the near future in Singapore. The Government of Singapore has correctly identified the relative positions of Hong Kong and Singapore with respect to trade with China.
Hong Kong is itself a member of the World Trade Organization and, as in the case of tax agreements, it negotiates and implements international agreements that it negotiates and implements as a stand-alone jurisdiction for tax and customs purposes. Given the improved access to Hong Kong`s commercial network, its proximity to mainland China and the Chinese Belt and Road Initiative, the