SINGAPORE: Singapore on Wednesday (Jan 26) signed a free trade agreement with the Pacific Alliance, a bloc made up of Chile, Colombia, Mexico, and Peru and a combined gross domestic product of more than US$2 trillion, said the Ministry of Trade and Industry (MTI) on Thursday.
Minister for Trade and Industry Gan Kim Yong and his counterparts from the member states signed the free trade deal as well as a joint declaration at the 16th Pacific Alliance Summit in Colombia.
The deal is a "modern and comprehensive" agreement that complements Singapore's network of free trade agreements and builds on existing agreements that the country has with the Pacific Alliance countries, said MTI in a press release.
It will enable Singapore companies to enjoy greater market access to the Pacific Alliance, by reducing their export costs so that their goods and services can be priced more competitively, it added.
"LANDMARK MOMENT" IN SINGAPORE'S PARTNERSHIP WITH PACIFIC ALLIANCE: PM LEE
In remarks delivered virtually, Prime Minister Lee Hsien Loong called the signing of the free trade deal and joint declaration a "landmark moment" in Singapore's partnership with the Pacific Alliance.
"Singapore is honoured to be the first Associate State of the Pacific Alliance, and the PASFTA (Pacific Alliance-Singapore Free Trade Agreement) will institutionalise and strengthen the economic links between our countries," he said.
More than 100 Singapore companies spanning diverse sectors, including trade, technology and innovation as well as infrastructure do business in Pacific Alliance countries.
Some Singapore companies in the Pacific Alliance include e-commerce giant Shopee, which launched its platform in Mexico, Chile and Colombia in 2021, as well as supply chain manager Olam International and blockchain accelerator Tribe Accelerator.
Some of the largest companies in the Pacific Alliance, such as Ecopetrol and Cemex, have also established commercial presence in Singapore, said Mr Lee.
"We hope that more companies from the Pacific Alliance will follow, and use Singapore as a gateway to uncover markets and seize business opportunities in our region," he said.
Negotiations for the Pacific Alliance free trade agreement were formally launched in 2017.
Mr Lee added that the signing of the agreement is a "strong message of hope and opportunity" as the world continues to grapple with the COVID-19 pandemic.
"We hope that the PASFTA will create even more opportunities for deeper economic and people-to-people ties between Latin America and Southeast Asia," he said.
The Pacific Alliance is the eighth largest economy worldwide.
In addition to chapters on the traditional areas of trade in goods, services and investment, the free trade deal also includes a chapter on international maritime transport services, a first for Singapore free trade agreements, said MTI.
"This chapter aims to enhance physical connectivity between Singapore and the Pacific Alliance, and encourage the exchange of best practices and training for those in the maritime sector," said the ministry.
With the signing of the agreement and the joint declaration, Singapore will become the first associate member of the alliance.
MTI said this will enable Singapore and the Pacific Alliance to explore economic cooperation in sectors of mutual interest, such as the digital economy, logistics and infrastructure, as well as food trade.
Mr Gan said the agreement is a "demonstration" of Singapore and the alliance's shared commitment to "greater integration and a rules-based, multilateral trading system".
"The PASFTA will allow us to create more opportunities for our businesses and support good jobs for our people. We look forward to the swift implementation of the agreement," said Mr Gan.
He added that as an associate member, Singapore is also committed to working with the alliance on mutual interest, to improve the quality of lives in the countries and regions.
MTI said the countries will now work on their respective ratification processes to bring the agreement into force. The free trade deal will enter into force after Singapore and two Pacific Alliance member states ratify the agreement.
Also present at the summit was Minister of State, Ministry of Culture, Community and Youth & Ministry of Trade and Industry Alvin Tan
During the Jan 23 to Jan 27 trip, Mr Gan and Mr Tan also met their counterparts from Colombia's Ministries of Commerce, Industry and Tourism, Environmental and Sustainable Development, Mines and Energy, as well as Foreign Affairs.
The two also met with Singapore and Colombian companies, business leaders, as well as the ministers and vice ministers of Chile, Peru and Mexico's Ministries of Trade and Foreign Affairs.
Mr Gan and Mr Tan were accompanied by officials from MTI, Enterprise Singapore and the Attorney-General's Chambers.