Overview of AHKFTA Case Model
Merchandise Trade
Trade in Services
- Chart 2: ASEAN Trade in Services with HKC (2015-2019)
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2015: Imports (67.2 HKD Billions), Export (53.6 HKD Billions), Deficit (13.6 HKD Billions)
2016: Imports (66.3 HKD Billions), Export (52.9 HKD Billions), Deficit (13.4 HKD Billions)
2017: Imports (71.1 HKD Billions), Export (56.1 HKD Billions), Deficit (15.0 HKD Billions)
2018: Imports (75.6 HKD Billions), Export (61.4 HKD Billions), Deficit (14.2 HKD Billions)
2019: Imports (69.0 HKD Billions), Export (61.6 HKD Billions), Deficit (17.4 HKD Billions)
ASEAN - HKC trade in services have increased in recent years. According to HKC's statistics, the bilateral trade in services reached HKD 131 billion in 2019, with ASEAN's exports to HKC amounting to more than HKD 61.6 billion and its imports from HKC standing at HKD 69.0 billion. Meanwhile, HKC's trade in services with ASEAN accounted for around 10% of its total trade in services, making ASEAN HKC's fourth largest partner for trade in services, after the Mainland China, the European Union and the U.S.
ASEAN has previously had deficit in trade in services with HKC, which has narrowed over the years as the growth rate of ASEAN's exports has been higher than the growth rate of ASEAN's imports. For example, ASEAN's trade in services deficit with HKC stood at HKD 13.6 billion in 2015, accounting for 11.3% of the total ASEAN-HKC trade in services.
Nonetheless, these numbers dropped to HKD 7.4 billion in 2019 (or 5.6% of the total bilateral
trade in services).
Among AMS, Singapore has been the largest partner of HKC in trade in
services, accounting for around 45% ASEAN's trade in services with HKC in 2019.
Below are examples of specific commitments in national treatment and market access made by AHKFTA parties(Trade in service Chapter 8);
Opens ship building services
Allows, in the financial leasing sector, foreign nationals to own up to 50% (versus the WTO's 40%) of the voting stock. Also, foreign nationals may become members of the Board of Directors to the extent of the foreign participation in the equity of the enterprise, while the respective limit is one-third under the WTO commitment.
Opens computer and related services, specialty design services, and spa services
Case model for overseas expansion in the BPO industry
Below is the business opportunities for Expansion of BPO industry in Hongkong;
FTA can be applied not only to merchandise trade but also to the services sector.
The successful business industries in the Philippines can be integrated into FTA agreements, particularly in the services sector, as a potential avenue for international expansion.
Utilizing FTA for overseas expansion can facilitate establishing a branch in Hong Kong, considering preferential treatment and tax reductions.
