Hong Kong secures expanded equal treatment and investment guarantees across Asean

Hong Kong corporations stand to gain from enhanced non-discriminatory treatment and investment assurances across 10 Asean countries, following the recent signing of a protocol amending an investment agreement. The agreement was inked in Manila, where representatives from Asean's economic ministers gathered to discuss trade. The protocol's signing was overseen by Bernard Chan Pak-li, Hong Kong's Undersecretary for Commerce and Economic Development, alongside Cristina Roque, Philippine Trade Secretary, and Suphajee Suthumpun, Thailand’s Deputy Prime Minister and Minister of Commerce.

The protocol ensures that Hong Kong firms will receive treatment no less favorable than that extended to local or foreign enterprises in the 10 Asean states. It incorporates the schedules of reservations from the investment agreement, effectively implementing articles that require parties to provide non-discriminatory treatment to other parties' enterprises and investments, barring certain reserved measures.

Authorities in Hong Kong anticipate that the protocol will provide legal certainty, improve the investment environment, and spur investment inflows.

Hong Kong has been Asean's third-largest recipient of outward direct investment for four straight years, with investments totaling HK$671.2 billion (US$86 billion). The city's standing as an international investment hub has been bolstered by the investment agreement, which has strengthened its position. A spokesperson for Hong Kong's Commerce and Economic Development Bureau expressed confidence that the signing of the protocol and its subsequent implementation will foster steady growth in the city's economic, trade, and investment relations with Asean.

The existing free trade agreement already guarantees equal treatment for Hong Kong service providers operating in designated sectors, including those with a commercial presence in these states. This new agreement will extend such favorable treatment to enterprises and their investments in non-services sectors. Once the new rules are implemented, Hong Kong investments will enjoy physical protection, fair treatment, and unrestricted freedom to transfer capital and profits.

The agreement also guarantees standard compensation for assets seized or lost due to war or conflict.

The 10 Asean nations covered by the agreement include the Philippines, Indonesia, Malaysia, Singapore, Brunei, Thailand, Vietnam, Cambodia, Laos, and Myanmar. The inclusion of East Timor, Asean's 11th member, is contingent upon the bloc's internal procedures.