REPUBLIKA.CO.ID, JAKARTA -- Indonesian Trade Minister, Enggartiasto Lukita, along with ASEAN Economic Ministers and Hong Kong Trade Minister, Edward Yau, signed the ASEAN-Hong Kong Free Trade and Investment Agreement, in Manila, Philippines.
The signing on Sunday (Nov 12), which was witnessed by the ASEAN Secretary General, Senior Officials, and delegations of ASEAN and Hong Kong, was a new phase for the economy of both sides.
"This agreement will begin to be implemented two months after Hong Kong and the four ASEAN member countries notify the completion of its domestic procedures to all parties," Lukita noted in a written statement received here on Monday.
ASEAN-Hong Kong, China Free Trade Agreement/AHKFTA, and ASEAN-Hong Kong, China Investment have started since 2014.
The ASEAN-Hong Kong Agreement aims to create more effective and mutually beneficial trade cooperation between ASEAN and Hong Kong.
In addition to implementing the elimination or tariff reduction, this agreement also includes cooperation in capacity building, especially for ASEAN member countries, to be able to utilize Hong Kong as an export transit to other countries.
One of Hong Kong's commitments is to strengthen economic cooperation with ASEAN through Economic and Technical Cooperation (ECOTECH).
The commitment will be utilized by Indonesia to increase capacity in several areas of cooperation to increase the potential and competitiveness of SMEs, trade facilitation, and e-commerce.
Meanwhile, through the signing of an investment agreement, ASEAN and Hong Kong are committed to creating a conducive investment climate through facilitation commitments, investment rules, and the provision of protection for foreign investors to encourage investment flows from and between both sides.
"With the signing of the agreement, investment from Hong Kong will flow further into Indonesia," the minister explained.
Several investment sectors include logistics, tourism services, and banking. This, he revealed, will encourage the growth of the manufacturing sector that will use Hong Kong as an export destination and as an export hub to the world.
"So far, Indonesia has not optimally utilized Hong Kong as an export hub, compared to other ASEAN member countries," he elaborated.
By 2016, Hong Kong was the 15th largest non-oil export destination for Indonesia. Hong Kong is also listed as the fourth largest investor partner in Indonesia, with an investment value of US$2.6 billion.
The total trade value of both countries in the same year reached $3.91 billion, with the value of Indonesian exports to Hong Kong at $2.14 billion and imports at US$1.77 billion.
Indonesia reached a surplus of $371 million. As for ASEAN, Hong Kong is the sixth largest trading partner in 2016.
The trade value of ASEAN-Hong Kong reached $93.3 billion, or about 4.2 percent of the total value of ASEAN trade with other countries. Hong Kong's total foreign direct investment (FDI) to ASEAN amounted to $9.6 billion, or 9.9 percent of the total FDI value in ASEAN.
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