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Why It Matters

Hope for trade with Britain

Singapore's plan to draw up a trade deal with post-Brexit Britain likely has many in the business community heaving a sigh of relief.

The assurance came from Prime Minister Lee Hsien Loong, who told the BBC late last month that Singapore would sign a deal with Britain after it exits the European Union.

Bilateral trade between Singapore and Britain is quite modest, coming in at $11.5 billion last year, just 1.36 per cent of Singapore's total international trade.

However, Britain has long been a gateway to Europe for many Singapore companies, and London remains the first port of call for businesses looking to venture into the continent.

The full impact of Brexit is still unclear, but having a trade deal with Britain is a good sign Singapore businesses with operations there will likely be able to proceed as normal. The same goes for the more than 4,000 British companies with operations here.

Moreover, it looks like Britain is keen to collaborate even more closely with Singapore. British High Commissioner to Singapore Scott Wightman said last month that Britain is ready to explore deeper collaboration in areas such as data science, big data and healthcare.

Brexit will take several years to work out and conclude, so any free-trade deal with Britain will also take some years to come to fruition.

However, given that it involves just two parties, it could well turn out to be a less complex and speedier process than some other free-trade agreements that Singapore has been involved in.

One of them, the Trans-Pacific Partnership, is in limbo after US President Donald Trump ended his country's participation, leaving the other 11 partners considering if they can or should keep the deal alive.

Brexit may have resulted partly from anti-globalisation sentiment, but the expression of intent from both Britain and Singapore for a trade deal is a glimmer of hope that international links will not be scuppered so easily.

A version of this article appeared in the print edition of The Straits Times on February 01, 2017, with the headline 'Hope for trade with Britain'. Print Edition | Subscribe