Singapore’s Trade Minister Talks Up Free Trade Agreements
Discusses the RCEP, TPP and EUSFTA
SINGAPORE – Lim Hng Kiang, Singapore’s Minister for Trade and Industry, provided an extensive overview of Singapore’s global positioning as a “nexus from which companies can control and coordinate their regional and global business activities.” Speaking this week at the Europe Day Celebration Lunch in Singapore, Kiang explained that, through a network of free trade agreements (FTAs), Singapore has re-positioned itself.
“In today’s supply chain, it is not uncommon for the raw materials and components making up a final product to cross national borders many times during the production process. As a business hub, it is imperative to give businesses the flexibility to source inputs from various countries across the region for their manufacturing activities and configure their supply chains in the most economical way,” commented Minister Kiang, noting that Singapore has established a network of 20 regional and bilateral FTAs.
“[Singapore is] ranked the fourth most connected country in the world by McKinsey Global Institute, and is one of only two Asian cities among the top ten rankings,” he further commented. “To enhance our relevance to global businesses, Singapore is actively involved in regional integration efforts, such as the Regional Comprehensive Economic Partnership (RCEP), which will link and consolidate all the FTAs of the Association of Southeast Asian Nations (ASEAN) under a single umbrella.”
The RCEP envisions broad economic partnerships between the ASEAN nations and their six FTA partners, including Australia, China, India, japan, South Korea and New Zealand. These countries would combine to create a market of more than 3 billion people and would have an aggregate gross domestic product of over US$18 trillion.
Continuing his discussion of regional economic partnerships, Minister Kiang remarked, “Another important initiative that Singapore is actively involved in is the multilateral Trans-Pacific Partnership (TPP). With its current twelve members, the TPP represents a free trade area of approximately 40 percent of global GDP and one-third of world trade. Both the TPP and RCEP are envisioned as high-quality agreements to deepen regional economic integration and they serve as possible pathways towards an eventual Free Trade Area of the Asia-Pacific.”
Singapore has also worked towards greater economic cooperation with its European trade partners, manifested most recently in the European Union – Singapore FTA (EUSFTA), which was implemented last September.
“The EU is Singapore’s third largest trading partner and largest source of foreign direct investment. There are over 10,000 European companies in Singapore,” he continued. “Not only will the EUSFTA strengthen our economic linkage with the EU, it will also offer EU companies a myriad of benefits such as tariff concessions [and] improved market access to various sectors.”
“Beyond bilateral trade, the EUSFTA serves the broader strategic interests of the EU to engage the region. [It] will provide a boost to the EU’s economic ties with ASEAN and serves as a path-finding template for the EU’s on-going negotiation with the other ASEAN countries, such as Malaysia, Vietnam and Thailand. Once concluded, these bilateral FTAs can pave the way towards an eventual EU-ASEAN FTA,” Minister Kiang concluded.
Chris Devonshire-Ellis of Dezan Shira & Associates in Singapore comments: “Singapore has done a tremendous job in positioning itself at the centre of Asia and has been highly assertive in its pursuit of lowering trade and duty barriers through free trade and double tax agreements. The country is without doubt one of the primary markets for reaching out into the rest of Asia, including China and India and as well as the ASEAN nations.”
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