Singapore ratified a landmark agreement in bolstering services trade in Asean yesterday, becoming the first member state to signal its strong commitment to creating a more transparent and stable environment for services trade.
In a Facebook post yesterday, Trade and Industry Minister Chan Chun Sing described the move as timely, as the role of the service sector is rising. He said it had great potential to drive inclusive growth in the region.
The Asean Trade in Services Agreement (Atisa) provides the widest preferential services market access to regional markets, enabling Singapore and Asean-based businesses to enjoy increased market access and reduced regulatory barriers, he said.
"The agreement will help strengthen services-related trading arrangements between AMS (Asean member states) in all services sectors including professional services, telecommunications, financial services, computer and related services, and distribution and logistics services," Mr Chan wrote.
He signed the Atisa in 2019, on the sidelines of the 25th Asean Economic Ministers' Retreat. Negotiations on the agreement were concluded in 2018.
Each Asean state's rights and obligations under the trade deal will commence when they complete their ratification procedures.
Singapore's rights and obligations commenced yesterday, after it completed its domestic procedures to ratify the agreement and notified the Asean secretary-general of the approval.
Mr Chan said Singapore looks forward to other member states ratifying the agreement within the year so that Asean-based businesses can reap the benefits as soon as possible.
Under Atisa, more than 70 per cent of the services sectors in the region will be fully open. Singapore businesses can also own more than 51 per cent of foreign equity shareholding rights in these sectors, with some allowing up to 70 per cent of foreign equity limits.
The agreement also creates a more stable and predictable environment for trade in services in the region, by reducing "beyond-the-border" barriers for companies. This also sets the stage for further services integration and liberalisation in Asean in the future.
Other benefits of Atisa include increased transparency and regulatory certainty, such as enabling companies to obtain information about current regulations and status updates on authorisation applications in a timely manner.
As of 2020, the service sector accounts for more than 85 per cent of resident employment in Singapore, with more than 1.89 million workers.
Asean markets were collectively Singapore's third-largest export destination in 2019, ahead of the United States and mainland China. The European Union and Japan were the top two export markets. That year, the Republic's services exports to the Asean region grew 11.3 per cent to $27.3 billion.