AUSTRALIA AND HONG KONG SIGN NEW TRADE AGREEMENT CONTAINING INVESTOR-STATE DISPUTE RESOLUTION PROVISIONS

On 26 March 2019, Australia and Hong Kong signed the Australia-Hong Kong Free Trade Agreement (A-HKFTA) and its associated Investment Agreement (Agreement).

These agreements were negotiated against the background of a heated political debate in Australia regarding the benefits and risks of investment treaties. This debate occurred as a result of an arbitration brought against Australia by Philip Morris in 2011 under the 1993 Hong Kong-Australia Bilateral Investment Treaty (1993 BIT), challenging the introduction of the Tobacco Plain Packaging Act 2011 (Cth).

The 1993 BIT will be replaced by the new Agreement once it enters into force, which is expected to occur after both countries complete their respective treaty-making processes and ratify the agreements. Accordingly, investors who may have a claim under the 1993 BIT should consider whether to pursue it before that treaty is terminated.

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