Say “Chile” to most Hong Kongers and the first thing that springs to mind will be supermarkets – the range of wines and out-of-season fruits brought in from the Southern Hemisphere country that spans 39 degrees of latitude and nearly 7,000 metres of altitude.
Cuisine is certainly important in trade with Chile but Hong Kong’s role as a trading port linking Mainland China with the world, bringing scope in a wide range of services and goods.
Recognising this, the governments of the Hong Kong Special Administrative Region and Chile have updated commitments on trade in services under their Free Trade Agreement (FTA), which entered into force on 6 April.
Signed in January 2022, the updated commitments improve existing commitments under the FTA and open up more service sectors on both sides, the Hong Kong Government announced. Chile has made commitments in more than 50 new service sectors, encompassing priority service sectors in which Hong Kong has traditional strengths or has potential for priority development, such as professional and business services, technical testing and analysis services, convention services, computer and related services, communication services including audio-visual services, distribution services and education services.
Secretary for Commerce and Economic Development at the time Mr Edward Yau and the Vice Minister of Trade of Chile Mr Rodrigo Yáñez, signed the exchange of notes at a virtual signing ceremony.
Sole Latin American FTA
Mr Yau noted that Chile is the first FTA partner of Hong Kong in Latin America. Since the FTA had entered into force in 2014, bilateral merchandise trade had grown steadily at 18.2% annually from 2015 to 2019, and had remained resilient amid the pandemic.
Mr Yau said: “I welcome the updated commitments, which are a testimony of the mutual and ongoing commitment of Hong Kong and Chile to a free and open trade and investment regime, amidst rising protectionism and uncertainties in the global trade environment. They represent a big boost of confidence to the rules-based trading system. The updates also demonstrate that the FTA is a vibrant and thriving platform for continuous trade liberalisation between our two sides.”
Current Secretary for Commerce and Economic Development, Mr Algernon Yau, said: “We welcome the entry into force of the updated services commitments that comes at an opportune time when world trade is reviving after the pandemic. The updated commitments will create better opportunities for our businesses and investors in diversifying their markets. It also demonstrates the Government’s dedicated efforts in seeking more favourable access to international markets as well as promoting the strengths of Hong Kong’s services sectors overseas.
“Hong Kong’s service providers can now enjoy deepened and broadened access to the Chilean market. I encourage our traders and service providers to seize this invaluable opportunity to unleash the untapped business opportunities in Chile, which is our first FTA partner in Latin America as well as a gateway to the Latin American markets.”
To date, Hong Kong has signed eight FTAs with 20 economies, namely the mainland, the Macao Special Administrative Region, the 10 member states of the Association of Southeast Asian Nations, Australia, Chile, the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), Georgia and New Zealand, all of which have entered into force.
In 2021, bilateral merchandise trade between Chile and Hong Kong increased 46.4% from 2020 at HK$20.87 billion (US$2.66 billion), Hong Kong’s Trade and Industry Department said. The average annual growth rate from 2017 to 2021 was 20.2%, the Hong Kong Government said.
Hong Kong imported HK$14.81 billion worth of goods from Chile in 2021. Major imports included vegetables and fruit; fish, crustaceans, molluscs and aquatic invertebrates; and beverages.
In 2021, Hong Kong's domestic exports of goods to Chile amounted to HK$7 million but re-exports were HK$6.05 billion. Major re-exports were telecommunications equipment; office machines and automatic data processing machines; and electrical machinery, apparatus and appliances, and electrical parts thereof.
Hong Kong was an important entrepôt for merchandise trade between Chile and the mainland In 2021, about HK$16.44 billion worth of Chile-mainland trade was routed through Hong Kong.
Hong Kong welcomed overseas investment and offered an environment in which there was a free flow of capital and return on investment without exchange controls, the Trade and Industry Department said.