Hong Kong and New Zealand sign Closer Economic Partnership Agreement
Monday, March 29, 2010
Hong Kong and New Zealand today (March 29) signed the Hong Kong, China - New Zealand Closer Economic Partnership Agreement (CEP Agreement), marking a new milestone in their trade and economic co-operation.
The Financial Secretary, Mr John C Tsang, and other guests witnessed the signing of the CEP Agreement by the Secretary for Commerce and Economic Development, Mrs Rita Lau, and the Minister of Trade of New Zealand, Mr Tim Groser, at a ceremony held in Hong Kong today.
The CEP Agreement is Hong Kong's first free trade agreement (FTA) with a foreign economy, and the second FTA following the Closer Economic Partnership Arrangement with the Mainland of China.
Speaking at the ceremony, Mrs Rita Lau noted that both Hong Kong and New Zealand are strong advocates of free market and liberal investment, and share the same values in the promotion of regional and international co-operation and in the pursuit of free trade.
"The CEP Agreement we sign today is comprehensive, of high quality and will take our business and economic ties to a new height. It opens not only a new chapter in our history of international trade but also doors to new opportunities," Mrs Lau said.
"The CEP Agreement will be a new incentive to attract New Zealand enterprises to come and invest in Hong Kong, bringing with them valuable expertise and experience," she added.
Under the CEP Agreement, liberalisation measures on both trade in goods and services will be introduced. The two sides will also work on strengthening bilateral trade and economic ties by facilitating investment and movement of business persons.
Followings are the key features of the CEP Agreement:
- On trade in goods, New Zealand will phase out over six years its import tariffs on all goods originating from Hong Kong. Upon complete elimination of New Zealand's tariffs, Hong Kong's annual tariff saving is estimated to be about HK$7 million on the basis of average merchandise trade figures from 2006 to 2008.
- On trade in services, Hong Kong service providers and the services they provide will enjoy secured preferential opportunities in the New Zealand market in a variety of service sectors. The Agreement encompasses sectors including maritime transport services, logistics and related services, audiovisual services and various business services, computer and related services, management consulting services, and services incidental to manufacturing. It also includes the six industries where Hong Kong enjoys clear advantages and the need to promote their further development was identified in the 2009-10 Policy Address, namely, education services, medical services, testing and certification services, environmental services, innovation and technology, and cultural and creative industries.
In terms of market access, restrictions in the form of limitations on foreign capital, number of service providers or operations, value of service transactions, number of persons employed, types of legal entity or joint venture requirements will be eliminated in a variety of service sectors in the New Zealand market. Hong Kong service providers and the services they provide in a wide range of sectors will be treated no less favourably than their New Zealand counterparts in similar circumstances. They will also automatically enjoy more liberalisation measures which New Zealand undertakes in its future FTAs with other trading partners.
- On movement of business persons, without compromising legitimate immigration control, business persons of the two economies in the categories of business visitors, intra-corporate transferees, and installers or servicers in specified service sectors will be granted temporary entry into Hong Kong and New Zealand under favourable conditions.
- On investment facilitation, to further enhance bilateral investment flows, the two sides have agreed to negotiate an Investment Protocol to the CEP Agreement, with a view to concluding the investment negotiations in two years' time after the CEP Agreement has entered into force. The investment negotiations will cover elements that aim to enhance the promotion and protection of investments between the two economies, including non-discrimination, fair and equitable treatment, full protection and security, etc.
On the whole, the agreement can enhance trade and investment flows between the two places, thereby benefiting the Hong Kong economy.
The CEP Agreement is expected to come into force in the last quarter of 2010, after completion of the necessary domestic procedures.
Total bilateral merchandise trade between Hong Kong and New Zealand amounted to about HK$6.5 billion in 2009. The average annual growth rate in bilateral trade between Hong Kong and New Zealand was 2.7% from 2005 to 2009. In 2009, major domestic export items to New Zealand were telecommunications, sound recording and reproducing apparatus and equipment. Major import items from New Zealand included fish, crustaceans, molluscs and aquatic invertebrates.
Total bilateral trade in services between Hong Kong and New Zealand amounted to about HK$ 3.7 billion in 2008. The average annual growth rate for total trade in services was 11% from 2004 to 2008. In 2008, trade in services between Hong Kong and New Zealand mainly included travel services, transportation services, as well as merchanting and other trade-related services.
Details of the CEP Agreement, including its full text, will be uploaded to the Trade and Industry Department's website: www.tid.gov.hk/english/hknzcep .
Hong Kong and New Zealand have issued a joint statement on the signing of the CEP Agreement. Please refer to the attachment (pdf format) for details.