SINGAPORE - Singapore companies, including its small and medium enterprises, will benefit from the a historic deal that will ease trade in goods and services among a dozen Pacific-rim nations that make up about 40 per cent of the world economy, the Ministry of Trade and Industry (MTI) said on Monday (Oct 5).
After five and a half years of negotiations, Singapore and 11 other countries - the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Vietnam - successfully concluded negotiations for the Trans-Pacific Partnership (TPP) on Monday.
Said Minister for Trade and Industry (Trade) Lim Hng Kiang: "The TPP embodies what Singapore sees as the future of the Asia-Pacific. It will transform the region by reducing tariff and non-tariff barriers substantially for both goods and services, encouraging greater investment, and addressing new trade challenges in the modern economy."
"The TPP has also been deliberately designed to be more inclusive, so that small and medium-sized enterprises can take full advantage of its benefits," he added.
The TPP countries represent a large market for Singapore businesses, with a population of 800 million and a combined GDP of around US$30 trillion, amounting to 40 per cent of global GDP.
Collectively, they are important trading partners of Singapore, comprising some of our biggest trading partners such as Malaysia, the US, Japan, Australia and Vietnam.
In 2013, the TPP countries accounted for 30 per cent of Singapore's total goods trade, worth S$300 billion, and 30 per cent of foreign direct investment in Singapore, amounting to S$240 billion.
The TPP will boost trade and investment flows between TPP countries as well as integrate the region into a single manufacturing base and market, said MTI.
Singapore companies will benefit from increased market access with all 11 other TPP countries.
The TPP will also put in place new and updated trade rules to assure Singapore investors and traders a more open, predictable and transparent environment in this fast-growing regional marketplace, it said.
Robust and balanced rules to promote fair competition and good governance, encourage innovation and grow the digital economy, will create more opportunities and allow Singapore-based companies to operate in the region with greater ease and confidence.
MTI said the 12 TPP countries will work intensively to tie up remaining details, and produce the final text for public review. The countries will also each begin respective domestic approval processes, to bring the TPP into force as soon as possible.
The Singapore Business Federation (SBF) and the American Chamber of Commerce in Singapore (AmCham) in statements on Tuesday welcomed the trade agreement and expressed hopes it would be ratified quickly by the 12 participating countries.
Said Mr Ho Meng Kit, CEO of SBF: "With global growth still below pre-financial crisis level, businesses need a comprehensive and ambitious TPP which could open up new opportunities, strengthen trade and investment rules, as well as improve business conditions in the region. More importantly, it could effectively help to address the 'behind the border'issues which many businesses face in today's complex environment."
"Notably, the agreement has special provisions for SMEs, which aim to help them integrate into the global supply chain and facilitate their business expansion. Addressing these issues will allow SMEs to invest, expand and also create jobs."
Mr Ho added: "We also need to have insights on the details of the trade pact to better examine what are the benefits and implications for Singapore business community. We will work with our trade negotiators to provide more information to our business community.
He also noted that the TPP is not an exclusive agreement, but has provisions to allow other trading nations in Asia to join later. As such, it serve as a pathway towards a free trade area for the Asia-Pacific.
Saying it will promote American growth and jobs, AmCham Singapore urges the United States Congress to support the TPP deal.
Said its chairman James Andrade: "The Asia-Pacific region will continue to see high growth rates for years to come. The TPP will enable American companies to take advantage of this environment through deeper trade and investment ties in the region. Increased regulatory coherence will be especially helpful for smaller firms that want to establish operations in multiple locations in the Asia-Pacific region."