Australia has formally opened talks with Hong Kong about a potential new free trade agreement (FTA) between the two regions.

Designed to aid Australia's transition to a broader-based economy, a deal will not only improve Australian business access to a key market, but would also open up new opportunities in the Chinese mainland and across Asia.

Hong Kong was Australia's eighth largest export market in 2016, with overseas sales coming to AU$11 billion (€7.34 billion). Additionally, the territory ranked as Australia's 12th largest trading partner, generating total two-way trade in goods and services of AU$15.3 billion.

The proposed FTA will particularly focus on securing significant access for Australian service providers to the Hong Kong market, but will also seek to address impediments to trade and investment on a broader basis.

Australia's minister for trade, tourism and investment Steven Ciobo said: "An FTA with Hong Kong will help Australian exporters take advantage of the opportunities in this dynamic market, helping create more Australian jobs, particularly for Australian service providers."