SINGAPORE: Singapore and the United Kingdom signed a free trade agreement on Thursday (Dec 10) that will “provide continuity and certainty” for businesses in both countries, said Singapore’s Trade and Industry Minister Chan Chun Sing.
The FTA was signed by Mr Chan and UK’s Secretary of State for International Trade Elizabeth Truss.
The UK and European Union are currently locked in post-Brexit trade deal talks, more than 10 months after the UK left the bloc.
Under the UK-Singapore FTA, companies from both countries will enjoy the same benefits they are receiving under the EU-Singapore FTA, said the Ministry of Trade and Industry (MTI).
These benefits include tariff elimination for goods trade and increased access to services and government procurement markets. There would also be a reduction of non-tariff barriers, including in four major sectors: electronics, motor vehicles and vehicle parts, pharmaceutical products and medical devices, and renewable energy generation.
“The UK-Singapore FTA will provide Singapore and UK companies with certainty and clarity in trading arrangements between both countries,” said MTI.
The FTA will cover more than £17 billion (S$30 billion) of bilateral trade in goods and services.
TARIFF ELIMINATION ON 84 PER CENT OF EXPORTS
Under the agreement, tariffs will remain eliminated for 84 per cent of all tariff lines for Singapore exports to the UK, said a joint ministerial statement by Singapore and the UK.
“Singapore Asian food products such as har gow (prawn dumplings) and sambal ikan bilis (spicy crispy anchovies) will continue to enter the UK tariff-free under flexible rules of origin, up to a combined quota of 350 tonnes annually,” the joint statement added.
“Singapore will also continue to bind our current level of duty-free access for all UK products entering Singapore, and maintain protections on iconic UK goods such as scotch whisky.”
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Virtually all of the remaining tariffs will be eliminated by Nov 21, 2024 – similar to the EU-Singapore FTA, added MTI. Singapore will also continue to bind its current level of duty-free access under the EU-Singapore FTA for all UK products entering the country.
The UK-Singapore FTA will also continue to provide for “liberal and flexible” rules of origin for the UK and Singapore’s key exports to each other’s markets, including automobiles, chemicals, clothing and textiles, electronics, machinery, pharmaceuticals, and petrochemicals.
In line with the current arrangement under the EU-Singapore FTA, UK and Singapore can continue to use EU-27 materials and parts in their exports to each other’s markets, said MTI.
“The EU-Singapore FTA provision on ASEAN cumulation would also remain. Once the relevant arrangements are put in place, Singapore exports using ASEAN materials and parts can qualify for preferential tariff treatment when entering the UK,” MTI added.
The UK-Singapore FTA will also remove “unnecessary” technical barriers to trade for Singapore and UK exporters, said MTI. The provisions in the agreement aim to reduce costs for exporters.
“This will create a level playing field for UK and Singapore companies and facilitate trade between (both countries),” said MTI, adding that the free trade agreement will remove
The UK-Singapore FTA will provide “enhanced” market access for service providers, professionals and investors to “further boost the dynamic trade” in services between both countries.
The agreement covers a range of services sectors including architecture, engineering, management consultancy, advertising, computer-related, environmental, postal and courier, maintenance and repair of ships and aircraft, international maritime transport, as well as hotels and restaurants services.
The FTA will also allow more opportunities in government procurement. MTI said the UK will grant Singapore “enhanced access” to city level and municipal level government procurement opportunities, with companies in transport, financial services and utilities among those that will benefit.
FTA “DEEPENS THE RELATIONSHIP” BETWEEN BOTH COUNTRIES: MR CHAN
Both countries will also start scoping the modules of a UK-Singapore Digital Economy Agreement (DEA), with the aim of launching negotiations on the DEA in 2021.
“The (DEA) will promote the flow of data across borders while maintaining high levels of personal data protection,” said MTI.
“It will also promote interoperable digital systems to connect our thriving innovation ecosystems, harness the interaction between financial services and the digital economy, and help shape global standards for effective regulation in key areas such as cybersecurity and emerging technology.”
Mr Chan said the signing of the UK-Singapore FTA “strengthens and deepens” the relationship between Singapore and the UK.
It will send a “strong signal” of the UK’s commitment to deepen its engagement of the region, the Trade and Industry Minister added.
“The UK has also indicated clear interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Singapore supports and welcomes,” said Mr Chan.
Both Singapore and the UK will now work on their respective ratification processes for the FTA to come into force.