Dubai: The stage is being set for a possible Free Trade Agreement between the UAE and Hong Kong, with a top official stating this would be the ‘logical next step’. The UAE is already Hong Kong’s biggest trading partner in the Middle East.
In 2022, total non-oil trade between UAE and Hong Kong came to $12 billion, growing by 30 per cent compared to 2020 and 40 per cent over 2019. “I believe our two economies - and the companies that drive them - have much to gain by a Free Trade Agreement between us,” said John Lee, Chief Executive of the Hong Kong Special Administrative Region, while in Dubai for the UAE–Hong Kong Business Forum.
“I’m confident it would substantially boost trade and investment ties between us,” said Lee.
Hong Kong was among the Top 10 trading partners for the UAE in 2021, with a contribution of more than 2 per cent of the country’s total non-oil trade.
Protection of investors
The UAE already shares an Investment Promotion and Protection Agreement (IPPA) with Hong Kong, signed in 2019. This commits both parties to a fair and equitable treatment of investors in areas such as compensation in the event of expropriation of investments and the right to free transfers abroad of investments and returns.
“The agreement has greatly helped and protected the interests and welfare of business persons here in the UAE as well as those in Hong Kong, allowing them to do business confidently,” said Hong Kong’s Secretary for Commerce and Economic Development Algernon Yau.
According to Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, there are solid prospects for increased bilateral cooperation in sectors such shipping, logistics, services and air transport. He said UAE’s foreign trade agenda is being enhanced by the country’s Comprehensive Economic Partnership Agreements (CEPA) program.
“Our foreign trade agenda is now being enhanced by CEPA, which is very similar to the Free Trade Agreement,” said Dr Al Zeyoudi.
“The UAE already plays an active role in China’s Belt and Road Initiative, and we are intent on building the partnership further with Belt and Road economies, especially Hong Kong.”
The UAE has signed CEPA deals with India, Israel and Indonesia, and talks are underway to do so with Turkey and Cambodia, said the Minister.
Hong Kong has signed eight FTAs, including with member countries of ASEAN (Association of South East Asian Nations).
Dubai Chambers in HK
Meanwhile, Dubai Chambers is opening an office in Hong Kong. Abdul Aziz Al Ghurair, Chairman of Dubai Chambers, said: “We want to promote trade and investment into Hong Kong and vice versa. This mutual decision has been in the works for some time.”
The Hong Kong Economic and Trade Office in Dubai opened in October 2021, the city’s first in the Middle East.
“For the international office, we will be recruiting talent locally; people who know the local market and experts from the UAE will also be working at this centre,” said Al Ghurair.
“Similarly, we’d also like the Hong Kong [Economic and Trade] office here to promote trade and investment in Hong Kong. I see this as a two-way communication.”
Multiple MoUs between UAE entities and Hong Kong:
- The one with Masdar City in Abu Dhabi will explore a pilot project together with startup accelerator Catalyst and two Hong Kong companies. These are HPA - an architectural firm co-owned by one of the Hong Kong delegates on the current trip to the UAE, Nicholas Ho Lik-chi - and a Cyberport startup, Negawattm.
- There is another between Hong Kong Science and Technology Parks Corporation and Sharjah Research, Technology and Innovation Park.
- The Hong Kong Trade Development Council has signed one with Dubai Chamber, which aims to strengthen bilateral trade and business collaboration between the two organisations by supporting trade promotion initiatives.
- Hong Kong Cyberport also entered one with the Dubai Future Foundation.
