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  jata  Malaysia's Free Trade Agreements

 

ASEAN - Hong Kong, China

BACKGROUND

  • The ASEAN Economic Ministers and the Secretary for Commerce and Economic Development of HKC signed the ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA) and ASEAN-Hong Kong, China Investment Agreement (AHKIA) on 12 November 2017 on the sidelines of the 31st ASEAN Summit in Manila, the Philippines.

  • The AHKFTA contains 14 chapters covering broad areas of market access liberalisation, trade facilitation, rules to promote confidence in trade, and cooperation aimed at facilitating trade in goods and services in the region.

  • In addition to AHKFTA and AHKIA, Malaysia, Brunei Darussalam, Singapore and HKC also signed a Side Agreement on the Definition of “Natural Person of a Party” under the AHKIA. The Side Agreement aims to maintain the current status whereby a natural person (Nationals and Permanent Residents – PRs) of Malaysia, Brunei Darussalam, Singapore and HKC will be accorded substantially the same treatment in the four Parties, in respect to measures affecting investment.

  • The AHKFTA and AHKIA have entered into force for Hong Kong, China and five (5) ASEAN Member States namely Lao PDR, Myanmar, Singapore, Thailand and Viet Nam. Malaysia implements the said Agreements, with effect from 13 October 2019.

TRADE IN GOODS

  • Chapter 2 (Trade in Goods) under the AHKFTA provides that each Party shall progressively reduce and/or eliminate customs duties on originating goods of the other Parties in accordance with its schedule of tariff commitments in Annex 2-1 (Schedules of Tariff Commitments). The agreed modality for tariff reduction and/or elimination under this Annex is as follows:
     

Category

End Rate

ASEAN 6

Cambodia/
Lao PDR/
Myanmar

Brunei Darussalam/
Malaysia/ Philippines/
Thailand

Indonesia/
Viet Nam

Normal Track

Normal Track1

0%

85%

65%
within
3 years

75%

50%
within
3 years

65%

50%
within
8 years

Normal Track 2

0%

20%
within 10 years

25%
within 10 years

15%
within
15 years

Sensitive Track

Sensitive
List

0-5%

10%

5%
within 12 years

10%

5%
within 12 years

20%

10%
within
17 years

Highly Sensitive
List

≤50%

5%
within 14 years

5%
within 14 years

10%
within
20 years

Exclusion List

no tariff commitments

5%

15%

15%

 

RULES OF ORIGIN

  • The Rules of Origin (ROO) for AHKFTA are provided for under Chapter 3 of the AHKFTA. Trade facilitating ROO have been established under the AHKFTA that would help encourage regional cumulation of inputs benefitting both ASEAN Member States and Hong Kong, China.

  • Article 4 (Origin Criteria) of Chapter 3 (Rules of Origin) stipulates that a good imported into a Party from another Party shall be treated as an originating good if it conforms to the origin requirements under any one of the following conditions:

    1. a good which is wholly obtained or produced in the exporting Party;

    2. a good produced in the exporting Party exclusively from originating materials from one or more of the Parties; or

    3. a good not wholly obtained or produced in the exporting Party;

and meets all other applicable requirements of this Chapter.

  • A good shall be treated as an originating good if the good has a Regional Value Content (RVC) of not less than 40% calculated using one of the methods below:
     
    1. Direct/ Build-up Method

 

 



Or
 

  1. Indirect / Build-down Method

 

 

 

  • Good subject to the Product Specific Rules (PSRs) shall be treated as an originating good if meets those PSRs as specified in Annex 3-2 (Product Specific Rules) of the AHKFTA agreement.

  • In order to enjoy preferential tariff treatment under the AHKFTA, eligible good must be supported by a Certificate of Origin (Form AHK) which has fulfilled the conditions for the issuance and verification, in accordance with Annex 3-1 (Operational Certification Procedures) of the Agreement.
    CO Form AHK

TRADE IN SERVICES

  • In line with the services liberalisation under the World Trade Organisation (WTO), Chapter 8 (Trade in Services) under the AHKFTA provides for the progressive liberalisation of the services sector through substantial sectoral coverage. Services and service suppliers/providers in the region will enjoy improved market access and national treatment in sectors/subsectors as specified in the schedules of specific services commitments (by Parties) as follows:

INVESTMENT

  • Due to HKC’s unique economic status, there is also a stand-alone ASEAN-Hong Kong, China Investment Agreement (AHKIA) in parallel with the main AHKFTA Agreement, in which Parties shall accord to investments fair and equitable treatment and full protection and security.

ASEAN-Hong Kong, China Investment Agreement (AHKIA)

  • The Parties are expected to enter into discussions to conclude Annex 1 (Schedules of Reservations) and other outstanding issues as stipulated in Article 22 (Work Programme) of the AHKIA.

CONTACT US

For matters relating to Preferential Certificate of Origin (CO Form AHK) / Rules of Origin, please contact:

  1. Ms. Siti Zahara Abu Bakar
    Email: sitizahara@miti.gov.my
     
  1. Mr. Augustino Jude
    Email: augustino@miti.gov.my
     
  1. Mr. Muhammad Faris Sameon
    Email: faris@miti.gov.my


For other enquiries with regard to AHKFTA, please contact following officers:

  1. Ms. Nor Hazirah Kan Hussin Kan
    Tel: 03-6200 0388
    E-mail: hazirah@miti.gov.my
MIDA MATRADE MPC MIDF MAI MSI SIRIM Berhad MIMOS Berhad Exim Bank Department of Standards Malaysia (JSM) InvestKL My Gov