Vietnam China Free Trade Agreement

ASEAN members together have a population of more than 650 million. Indonesia accounts for more than 40% of the region`s population and its population has been the most opposed to the agreement. [17] [13] Hong Kong has a closer Economic Partnership Agreement (EPA) with China, which allows market access for Hong Kong service providers and duty-free processing of products originating in Hong Kong. With the EPA, the ASEAN-China Free Trade Agreement and AHKFTA, Hong Kong has the potential to facilitate and increase investment and trade across the region. An Indonesian product containing, for example, Australian coins could expect tariffs elsewhere in the Asean Free Trade Area. “The economic benefits of the agreement may be marginal for Southeast Asia, but there are some interesting trade and customs dynamics for Southeast Asia,” said Nick Marro of the Economist Intelligence Unit (EIU). Vietnam Briefing is produced by Dezan Shira – Associates. The company supports foreign investors throughout Asia from branches around the world, including in Hanoi and Ho Chi Minh City. Readers can write to vietnam@dezshira.com to get more help in their activities in Vietnam. With the entry into force of the free trade agreement, Hong Kong will grant duty-free access to all products from ASEAN, while the various Member States have made the following commitments to reduce tariffs on products from Hong Kong: China first proposed the idea of a free trade area in November 2000. The leaders of ASEAN and China therefore decided to discuss economic integration measures in the region the following year[1][2] In Brunei, they supported the creation of an ASEAN-China free trade area.

[3] The China-backed agreement is seen as an alternative to the Trans-Pacific Partnership (TPP), a Washington trade initiative that no longer exists. Although China already has a number of bilateral trade agreements, this is the first time it has signed a regional multilateral trade pact. Changes to the free trade area framework mainly concerned Vietnam. These amendments were intended to help Vietnam reduce tariffs and were cited as guidelines. [14] The free trade agreement reduced tariffs to 7,881 categories of goods, or 90% of goods imported to zero. [15] This reduction came into effect in China and in the original six ASEAN members: Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. The other four countries are expected to follow in 2015. [16] 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. 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.

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