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In September, Asean’s economic ministers issued a joint statement affirming their desire to accelerate the addition of four new members into the RCEP – namely, Hong Kong, Sri Lanka, Chile and Bangladesh. As an Asean-led initiative, it is notable that Hong Kong has the support of all Asean countries to join the trade bloc.
Some 70 per cent of Hong Kong’s total merchandise trade in 2023 and almost half its service trade in 2022 was conducted with RCEP members. These numbers underscore the existing depth of trade ties and interconnectivity. Joining the bloc would bolster the attractiveness and viability of markets in Northeast Asia, Southeast Asia and Oceania for Hong Kong businesses.
Hong Kong is well positioned to add substantive value to its long-standing economic partners, especially in Southeast Asia. The systematic and wide-ranging lowering of trade barriers will considerably deepen trade between Hong Kong and Asean. The RCEP strives to eliminate 90 per cent of tariffs on imports over the next two decades.
Hong Kong’s main exports to Asean include electronics and vehicle parts. Many among our small and medium-sized enterprises stand to gain from the drastic reduction of overhead costs and logistical obstacles to doing business in RCEP economies.
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In reducing import costs, Hong Kong’s accession would increase the inflow of high-quality consumer goods and bring down manufacturing costs for downstream firms importing these components. Manufacturers and consumers alike can clearly benefit.
