Hong Kong-Chile FTA Enters Into Force
SHANGHAI – The free trade agreement (FTA) signed between Hong Kong and Chile has come into force in both jurisdictions following its publication in Chile’s Official Journal on 1 December 2014. It came into force in Hong Kong on 9 October 2014.
The agreement, initially signed in September 2012, is Hong Kong’s first to be signed with a country outside of Asia or Europe. Its far-reaching provisions cover bilateral trade in goods and services, as well as investment, and entail commitments beyond those required by both parties’ membership in the World Trade Organization.
Chile has removed import tariffs on roughly 88 percent of scheduled items, and will eventually remove tariffs on an additional 10 percent of items through 2017. The remaining 2 percent of tariff lines to be left untouched represent national priority industries such as cereals, sugars, and iron/steel components.
For its part, Hong Kong has committed to abolish tariffs on all goods originating from Chile (which will need to fulfil certain requirements to be authenticated as such). Hong Kong investors benefit from facilitated access to the Chilean market for a range of services, including financial services, telecommunications services, and professional services – traditional strengths of the special administrative region.
The agreement also contains auxiliary provisions on promoting competition, facilitating access to government procurement markets, streamlining customs procedures, boosting environmental protection, and establishing a comprehensive dispute resolution mechanism. The two sides have announced plans to begin negotiating a bilateral investment treaty (BIT) following the FTA’s entry into force.
It is not only Hong Kong that has been strengthening ties with Chile. Chile’s trade with mainland China has boomed in recent years, thanks to Chinese demand for Chilean copper, fruit, wine and seafood. An FTA has been in place between the two nations since 2005, helping to bring more than US$20 billion in Chilean exports to the Middle Kingdom in 2013.
While to date, these thriving trade relations have yet to see commensurate levels of Chinese FDI into Chile, the South American country is now vigorously promoting its investment potential through infrastructure projects and bilateral agreements such as that featured in this article.
The full text of the Hong Kong-Chile FTA can be found here.
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