Chile to join Hong Kong FTA

The agreement, initially signed in September 2012, is Hong Kong’s first to be signed with a country outside of Asia or Europe. Its 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 will remove import tariffs on roughly 88% of scheduled items and eventually remove tariffs on an additional 10% of items until 2017. The remaining 2% of tariff lines to be left unaltered represent national priority industries such as cereals, sugars and iron/steel components.

On the other hand, Hong Kong has committed to abolish tariffs on all goods originating from Chile. However, it will need to fulfill certain requirements to be authenticated as such. Hong Kong investors are expected to 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.

Additionally, Chile’s trade with mainland China has boomed in recent years due to the Chinese demand for Chilean copper, fruit, wine and seafood. A FTA has been in place between the two nations since 2005, helping to bring more than USD 20 billion in Chilean exports to the Chinese market in 2013.

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