Singapore’s Minister for Trade and Industry Chan Chun Sing and the United Kingdom’s Secretary of State for International Trade Elizabeth Truss signed the UK-Singapore Free Trade Agreement (FTA) in Singapore on Dec 10.
The Minister and Secretary of State also agreed to start scoping the modules of a UK-Singapore Digital Economy Agreement (DEA). They have aimed to begin launching negotiations on the DEA in 2021.
Under the FTA, Singapore and UK companies will enjoy the same benefits that they are receiving under the EU-Singapore FTA.
This includes the eliminating of tariffs for goods trade, increased access to their respective services and government procurement markets, as well as 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 agreement will also support the regional operations and supply chains of companies in the UK and Singapore through the cumulation of countries in EU-27 and Asean.
In line with the current arrangement under the EU-Singapore FTA, UK and Singapore companies can continue to use materials and parts sourced from the EU-27 in their exports to each other’s markets.
The provision on Asean cumulation within the EU-Singapore FTA would also remain.
Once the arrangements are confirmed, Singapore exports using Asean materials and parts can qualify for preferential tariff treatment when entering the UK.
The move, says the Ministry of Trade and Industry (MTI) will strengthen both countries’ roles as business hubs within their respective regions.
“The signing of the UK-Singapore FTA… will provide continuity and certainty for businesses in both countries and send a strong signal of the UK’s commitment to deepen its engagement of the region. Our intention to launch negotiations on a pioneering DEA between the UK and Singapore early next year also reflects both countries’ desire, as forward-looking and digitally advanced economies, to set the template for digital trade rules of the future,” says Chan.
“The UK has also indicated clear interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Singapore supports and welcomes,” Chan adds.
In addition to the FTA, both countries have committed to begin negotiations to conclude a high standard investment agreement. This will take place within two and four years respectively once the FTA between UK and Singapore come into force.
“This will ensure that bilateral investments are covered by robust and up-to-date treaty safeguards, as well as provide businesses and investors with the certainty of investment protection,” says MTI.
