Singapore and the Eurasian Economic Union (EAEU) are on the cusp of completing a joint feasibility study that will lay the foundation for talks on a free trade agreement (FTA), said Minister of State for Trade and Industry Koh Poh Koon.
While the two sides are geographically distant, such an agreement would be a boost for trade in services, be it IT, electronic payments or trade facilitation, he said.
The joint study, which was started in October, is likely to be tabled for deliberation by the EAEU countries by next month, for the countries to decide whether to start formal negotiations for an FTA as proposed by the study.
"That would hopefully lead us to commencing our negotiations for an FTA between Singapore and the Eurasian Economic Union," said Dr Koh. The EAEU consists of Russia and former Soviet states Armenia, Belarus, Kazakhstan and Kyrgyzstan, with a common market of 180 million people and a total gross domestic product of US$4.2 trillion (S$5.8 trillion).
While the grouping is already a Customs union that has virtually no internal tariffs among its members, much can be done to liberalise trade in services and investment, said Dr Koh. "Their traditional view (of trade) is still trade in goods," he said.
But with high levels of connectivity today, two regions that are far apart can conduct significant trade in other areas too, he added.
This could, for instance, be in professional services, e-payment platforms and electronic single windows that allow cross-border traders to submit regulatory documents at one location.
"E-commerce is already taking on a more important role in global trade, and until you have liberalised trade in services, many of these new forms of trade that also involve goods flows will not be able to go on smoothly," he said.
Dr Koh said both sides are keen to conclude a high-quality FTA, hopefully by the end of next year.
Singapore and the EAEU have established mechanisms for regular exchanges, including a high-level dialogue platform with the Eurasian Economic Commission - the regulatory body of the EAEU - which held its first meeting this year.
"These are practical ways in which our governments are working together to strengthen the trade architecture, legal framework, and build the links that will send a strong signal to business communities from Central Asia and South-east Asia that we are open to business, and that we are not going towards protectionism and isolationism," he said.