Singapore would sign trade deal with Britain post-Brexit: PM

A British Union flag flies near the Elizabeth Tower, otherwise known as Big Ben, opposite the Houses of Parliament in central London on Dec 7, 2016.
A British Union flag flies near the Elizabeth Tower, otherwise known as Big Ben, opposite the Houses of Parliament in central London on Dec 7, 2016.PHOTO: AFP

Experts say bilateral trade may be small but there is plenty to interest business community

Singapore's free trade agreement with the European Union is yet to be ratified, but already the economic community is gearing up for a fresh deal with the EU's soon-to-be former member - Britain.

Bilateral trade between Singapore and Britain might be small, but longstanding ties between the two nations will give such an agreement a level of significance when it gets to the negotiating table, experts said.

Prime Minister Lee Hsien Loong told the BBC last Friday that Singapore would sign a trade deal with Britain after it exits the EU. His remarks followed those made by British High Commissioner to Singapore Scott Wightman, who said last Wednesday that Britain is ready to explore deeper collaborations with Singapore in areas such as data science, smart cities and healthcare.

OCBC economist Selena Ling noted that areas of traditional collaboration, such as financial services, business and legal services and education, will likely be important areas of discussion as well.

IE Singapore data shows that total trade between Singapore and Britain amounted to about $11.5 billion last year, or 1.36 per cent of Singapore's total international trade. This may be a small figure, but there is still a lot about Britain that will interest the business community, and vice versa, noted CIMB economist Song Seng Wun.

He said: "There are many Singapore companies with operations and investments there, including household names such as GIC and Temasek Holdings. British companies, in turn, see Singapore as a gateway to the region."

Still, Ms Ling noted that there is still much uncertainty before the two countries even get to the negotiating table. "Prime Minister Theresa May has a lot on her plate. The UK Supreme Court has yet to rule on whether she can even begin the talks to leave the EU," she noted.

Mr Song agreed, noting that talks on a free trade deal can happen only years from now, once Britain has completed its divorce from the EU. He added: "This could be more than two years down the road."

The EU is Singapore's third-largest trading partner. The EU-Singapore Free Trade Agreement involves the EU eliminating tariffs on all imports from Singapore. Singapore exporters of electronics, pharmaceuticals, chemicals and processed food products stand to benefit in particular.

Separately, Deputy Prime Minister and Coordinating Minister for Economic and Social Policies Tharman Shanmugaratnam is visiting Germany, Brussels and Britain. He flew to Stuttgart, Germany, yesterday, and will return on Jan 30.

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A version of this article appeared in the print edition of The Straits Times on January 24, 2017, with the headline 'Strong ties 'will boost any S'pore trade deal with post-Brexit UK''. Print Edition | Subscribe