The free trade agreement (FTA) inked by the United Kingdom and Singapore yesterday will offer “immediate and tangible” benefits for businesses, said Minister for Trade and Industry Chan Chun Sing.
These include tariff elimination for goods trade and increased access for government procure-ment markets.
Both nations are also working to apply the UK-Singapore FTA immediately after the Brexit transition period ends.
Here is a look at the key benefits for Singapore businesses under the deal, which will kick in on Jan 1:
1. Tariff elimination, enhanced market access
The UK-Singapore FTA will maintain the same timeline for tariff reductions as the European Union-Singapore FTA. This means that 84 per cent of Singapore exports entering Britain will continue to be duty-free once the agreement enters into force. These include Asian food products, electronics, pharmaceuticals and petrochemicals.
By Nov 21, 2024, tariffs on virtually all remaining products will be eliminated, such as on textiles, fruits and selected meat and seafood produce.
Liberal and flexible rules of origin for Britain and Singapore’s key exports to each other’s markets, such as cars, chemicals, electronics and pharmaceuticals, will continue to be provided for.
Asian food products made in Singapore will continue to enjoy enhanced market access. For example, products such as har gow (prawn dumplings) and sambal ikan bilis (spicy crispy anchovies) will be able to enter Britain tariff-free, up to an annual combined quota of 350 tonnes.
2. Enhanced market access in service sectors
Service providers, professionals and investors will have enhanced market access, creating a level playing field for businesses in both Britain and Singapore. This includes sector-specific rules on non-discrimination and transparency.
A wide range of services is covered under the agreement, including architecture, engineering, management consultancy, international maritime transport as well as hotel and restaurant services.
Standard Chartered Singapore, for instance, will be entitled to additional customer service locations under the FTA, the bank said yesterday. This comes on top of the 50 locations which it is already entitled to as a “Significantly Rooted Foreign Bank”, a framework under which it is accorded enhanced privileges.
3. Investment protection, enhanced IP rights
Singapore and Britain have committed to start negotiations for a high standard investment protection agreement within two years of the FTA coming into force, and aim to conclude the negotiations within four years.
The FTA also allows Singapore and Britain to continue enjoying a comprehensive Intellectual Property Rights Chapter which covers copyright, enforcement and geographical indications.
4. Reduced non-tariff barriers, lower costs for exports
The agreement will do away with unnecessary technical barriers to trade for Singapore and British exporters, facilitating trade and creating a level playing field for firms in both jurisdictions.
Duplicative testing and certification procedures would be reduced, lowering operational costs for exporters. Sectors that could benefit include electronics, motor vehicles and vehicle parts, pharmaceuticals, renewable energy, as well as meat and meat products.
5. Government procurement opportunities
Singapore will be granted enhanced access to city-level and municipal-level government procurement opportunities in Britain, which means that firms here can bid for more government projects in Britain.
Firms that could benefit include those in transport, financial services and utilities.