World Trade Organization
Non-agricultural Market Access Negotiations

Hong Kong's Merchandise Trade

• Hong Kong's economy has been highly externally oriented and dependent on trade with the rest of the world. Our total merchandise trade is over three times of our GDP. In 2010, Hong Kong ranked 11th among the world's exporters and 9th among the world's importers. Overall, Hong Kong was the world's 10th largest trading entity in goods.
  
  

• Major trading partners of Hong Kong in 2010 were the Mainland of China, the USA, Japan, Chinese Taipei, Singapore, Republic of Korea, India, Germany, Thailand and Malaysia.
  
  

• Major exports of Hong Kong in 2010 included : 
  
  - Gems and jewellery
  - Electrical machinery and equipment
  - Chemicals and plastics
  - Base metal and articles of base metal
  - Processed food, beverages and tobacco
  

Market Access Negotiations under the GATT/WTO

• Market access negotiations under the auspices of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) have been a major instrument to open up markets and move towards global trade liberalisation.
  
  

• Successive rounds of multilateral negotiations have succeeded in lowering significantly tariffs on non-agricultural products (Note 1). The last round of negotiations, the Uruguay Round, alone has achieved an overall reduction of about 40% in average trade-weighted tariffs for developed economies and 30% for economies-in-transition, and a significant increase in the coverage of tariff bindings (Note 2) by developing economies.
  
  

Note 1: Non-agricultural products cover essentially all products falling under Harmonized System (HS) Chapters 25 to 97, and certain fish and fish products in HS Chapters 3, 5, 15, 16 and 23. Note 2: Tariff binding refers to a legally binding commitment not to increase tariffs on a specific item above the level at which it is bound.

Hong Kong's Tariff Commitments

• Hong Kong does not apply any tariffs. So far, our contribution to multilateral tariff negotiations has been through binding our tariffs on specific items at zero, i.e. a commitment not to impose any tariffs on such items. Hitherto, our tariff commitments (i.e. tariff bindings at zero) in the WTO amount to about 66% of our imports in 2010 value terms.
  

The Case for Further Tariff Reduction

• Despite successive rounds of negotiations to bring down tariffs, substantial tariff barriers remain. Though tariffs have been significantly reduced in average terms, tariff reductions do not spread out evenly across both economies and sectors. High tariffs in certain sectors are commonly found and remain a material barrier to free trade. While high tariffs represent impediments to trade, tariffs at low levels, such as those below 2-3%, constitute trade nuisance because they impose administrative burden on both traders and customs officials, thus hampering efficient flow of cross border trade.
  
  

The Doha Development Agenda

• The Fourth WTO Ministerial Conference held in November 2001 in Doha, Qatar launched the Doha Development Agenda, including amongst others negotiations to reduce/eliminate tariffs and non-tariff barriers for all non-agricultural products. Accordingly, members have been negotiating on the modalities for reduction/elimination of tariffs and non-tariff barriers. Please click here for the relevant paragraph in the Doha Ministerial Declaration. 
  
  

• In July 2004, WTO Members reached agreement on a framework of modalities for, among other areas, non-agricultural market access. Please click here for the framework. 
  
  

• In December 2005, WTO Members met in Hong Kong for the Sixth WTO Ministerial Conference. Key progress in the negotiations of non-agricultural market access includes the adoption of the Swiss formula for tariff reduction (Note 3), and the setting of timeline for negotiations in 2006. Please click here for relevant paragraphs in the Hong Kong Ministerial Declaration.
  
  

• At the Ministerial meetings in July 2008, WTO Members bridged the gaps on a number of key issues in reducing tariffs and increasing market access for non-agricultural products. Although the Ministerial meetings have not resulted in a successful outcome, Hong Kong, China remains committed to the WTO negotiations on non-agricultural market access. 

Hong Kong, China's Negotiation Objectives on Non-agricultural Market Access

• As a staunch supporter of free and open trade, Hong Kong, China attaches great importance to maintaining the momentum of trade liberalisation, including reduction and elimination of tariffs and non-tariff barriers. Given our free trade regime, we stand to benefit from further reduction and elimination of tariffs and non-tariff barriers by our trading partners.
  
  

• Our broad objective for the multilateral negotiations on non-agricultural market access is to achieve significant market access improvements through substantial reduction and elimination of tariffs and non-tariff barriers, especially in sectors of interest to Hong Kong. We also hope that such market access improvements will be implemented as soon as possible following the conclusion of the negotiations.
  
  

• In particular, we consider that the negotiations on non-agricultural market access should:
  
  - be comprehensive, covering all non-agricultural products;
  - achieve commercially meaningful tariff cuts;
  - address high tariffs, tariff escalation as well as tariff peaks;
  - expand the scope of tariff bindings of all WTO Members; and
  - address non-tariff barriers.