SINGAPORE - Singapore will sign a free trade agreement (FTA) by the end of this year with the Pacific Alliance (PA), a trading bloc of four Latin American nations - Chile, Colombia, Mexico and Peru.
Minister of State for Trade and Industry Alvin Tan said on Tuesday (June 29) the agreement will enable businesses on both sides to access market opportunities and foster greater cooperation in areas such as e-commerce, customs, trade facilitation and maritime services.
"I am pleased to share that our chief negotiators are preparing the agreement for signature by the end of this year," Mr Tan said at a webinar hosted by the Lee Kuan Yew School of Public Policy, the Ministry of Trade and Industry, and the embassies of the four PA countries here.
Negotiations for the Pacific Alliance-Singapore Free Trade Agreement were concluded last December, after three years of deliberations.
The four-nation PA has a combined gross domestic product of US$2.1 trillion ($2.8 trillion).
In 2019, Singapore's total trade in goods with the PA stood at $6.1 billion, which accounted for 33.2 per cent of the Republic's total merchandise trade with Latin America.
Trade in services amounted to $2.6 billion in 2018, accounting for 28.2 per cent of Singapore's total trade in services with the region.
The FTA will make Singapore the first associate state of the alliance, Mr Tan said.
The PA was formally established in June 2012. Singapore became an Observer State to the PA in 2014 and a Candidate Associate State in 2017.
"The FTA sends a powerful message to the global community that our countries remain open for business and that despite pressures placed on economic multilateralism, we want to reach out to one another and create opportunities for our people," said the minister.
Singapore already has existing agreements with three of the four PA countries - Chile, Mexico and Peru - that are member states of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Ms Laura Valdivieso Jimenez, Colombia’s deputy minister for foreign trade, said that commercial ties between PA and Singapore have grown in spite of the global trade disruption last year.
“The Pacific Alliance members share with Singapore the idea that growth driven by productivity and innovation is the best way to ensure long term, sustainable economic development. We are sure that the FTA will further boost our commercial and economic relationship,” she said.
Mr Tan also commended the negotiators from both sides, who he said have “persevered through four years and the Covid-19 crisis to complete the FTA”.
“This FTA gives businesses the assurance that their investments will be supported by a robust trade architecture,” he added.