Hong Kong to strive to join Regional Comprehensive Economic Partnership to reap trade benefits

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22nd November 2020 – (Hong Kong) China, Japan, South Korea, Australia, New Zealand and the ten ASEAN countries formally signed the Regional Comprehensive Economic Partnership Agreement (RCEP) earlier. Financial Secretary Paul Chan stated in his blog today (22nd) that he will strive for Hong Kong to become the first group of economies to join after the agreement takes effect, which will benefit Hong Kong’s service trade and investment. Chan said that RCEP is the world’s largest trade agreement, covering about three points of the world’s total population and GDP. Members will implement tariff reductions, open market access, remove trade barriers, and simplify customs clearance procedures to reduce the cost of trade between members.

He pointed out that the total bilateral trade in goods between Hong Kong and the 15 member states of RCEP last year was as high as US$765.5 billion, accounting for 71% of Hong Kong’s total trade in goods. It is believed that joining RCEP will benefit services trade and investment. He continued that Hong Kong had expressed its willingness to join RCEP early as 2018.

In addition, Chan also mentioned that the steady development of the Mainland is the greatest support for Hong Kong’s development. In terms of internal circulation, Hong Kong companies can use the Greater Bay Area as an entry point to explore the mainland’s market for high value-added services and professional services. As for external circulation, Hong Kong can play a role in finance, innovation and technology, especially promoting the internationalisation of the RMB.

The Regional Comprehensive Economic Partnership is a free trade agreement between the Asia-Pacific nations of AustraliaBruneiCambodiaChinaIndonesiaJapanLaosMalaysiaMyanmarNew Zealand, the PhilippinesSingaporeSouth KoreaThailand, and Vietnam. The 15 member countries account for about 30% of the world’s population (2.2 billion people) and 30% of global GDP (US$26.2 trillion) as of 2020, making it the biggest trade bloc in history.Unifying the preexisting bilateral agreements between the 10-member ASEAN and five of its major trade partners, the RCEP was signed on 15th November 2020 at a virtual ASEAN Summit hosted by Vietnam, and will take effect as soon as it has been ratified by at least six ASEAN and three non-ASEAN signatories.

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