SINGAPORE - A free trade deal between Singapore and the European Union will continue to apply to Britain during its 11-month Brexit transition period starting on Saturday, the Ministry of Trade and Industry said on Friday (Jan 31).
Singapore and the UK meanwhile are working on an agreement to maintain trade continuity after the transition period ends and the EU-Singapore Free Trade Agreement (FTA) no longer applies to Britain.
Britain formally leaves the EU on Jan 31, but there will be a transition period from Feb 1 through Dec 31 this year, when the UK will will be treated functionally as an EU member state and continue to be party to the EU's international agreements including the EU-Singapore FTA, which came into force in November 2019.
Trade and Industry Minister Chan Chun Sing said in the MTI statement: "The UK and Singapore share robust and longstanding economic ties. For Singapore companies doing business with the UK, the transition period will provide certainty for continued trade between Singapore and the UK.
"We will continue our close cooperation with the UK to broaden and deepen our bilateral economic relations for the future."
The Singapore Business Federation (SBF) said it was glad the EU-Singapore FTA will continue to apply during the transition period.
SBF chief executive Ho Meng Kit said Brexit will bring about a degree of certainty for Singapore businesses trading with or investing in the UK, and the transition period will give businesses time to prepare for an independent UK regulatory environment.
But he noted though that the nature of UK's post-Brexit relationship with the EU, and its subsequent impact on the UK's domestic regulations affecting commerce, trade, and investment is still not defined.
He said: "This uncertainty translates into risks over supply chain and investment decisions. Greater clarity on UK's independent regulatory regime will help our companies to execute their market strategies in the country.
"That said, we believe that Brexit's impact on Singapore companies," said Mr Ho.
Noting that Singapore firms operate mainly in real estate, hospitality, investments and retail in the UK, he added: "They have continued to operate cautiously and develop their businesses along their own trajectories, evident in the recent acquisitions of student accommodation assets were made by Singapore Press Holdings, Far East Orchard and Mapletree Investments."
Said Mr Ho: "Moving forward, we look forward to the UK and Singapore governments working together to ensure that the benefits of the agreement will be enjoyed by businesses in both countries thereafter.
"We also urge both governments to ensure the protection of investment rights and assist any businesses impacted by developments."