Singapore signs free trade agreement with Chile, Colombia, Mexico and Peru

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SINGAPORE – A free trade agreement reached on Wednesday (January 26) between Singapore and a bloc of countries made up of Chile, Colombia, Mexico and Peru should give the Republic better access to what is collectively the world’s eighth largest economy, removing most tariffs on goods and allowing local businesses to bid on government projects in the Americas.

The Pacific Alliance-Singapore Free Trade Agreement, or Pasfta, is Singapore’s first direct FTA with the Pacific Alliance, a bloc with a combined gross domestic product of more than $2.6 trillion.

It caps negotiations that have lasted more than four years and is the first to be completed as the Pacific Alliance pursues similar talks with Australia, Canada, Japan and New Zealand.

Welcoming the success of the talks, Prime Minister Lee Hsien Loong said in pre-recorded remarks for the 16th Pacific Alliance Summit on Wednesday: “This is a historic moment in Singapore’s partnership with the Pacific Alliance. Our two regions are actually more connected. that people imagine.

“Let’s encourage our companies and our people to take advantage of this strengthened relationship to explore opportunities in each other’s regions.”

More than 100 Singaporean companies currently operate in the Pacific Alliance, including e-commerce platform Shopee and high-tech software company Taiger.

The bloc’s imports include avocados from Mexico and blueberries from Peru. In return, Singapore exported machinery and minerals to Peru, jet engines and gas turbines to Chile, and vehicle parts to Colombia.

The 25-chapter FTA aims to create more opportunities for greater trade, with agricultural trade, technology and infrastructure identified as possible areas of growth.

In its current form, goods will be processed more easily through customs and service providers and investors from Singapore will be treated as favorably as those from the bloc in the Pacific Alliance countries.

Singapore and Pacific Alliance member states will also need to publish their government plans in a timely and non-discriminatory manner so that suppliers can submit a bid with ample time for preparation. Investors and business visitors can enter Pacific Alliance countries for 30 days.

If ratified by all parties, the deal is expected to have its most dramatic impact on trade between Singapore and Colombia, with which Singapore currently has no FTA.

Some 85.7% of the tariff lines the nation of 50.8 million currently has on goods from Singapore will either be reduced or removed, the Ministry of Trade and Industry (MTI) has estimated.

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