SINGAPORE - Negotiations on the Pacific Alliance-Singapore free trade agreement (FTA) are under way, involving a grouping of four countries - Chile, Colombia, Mexico and Peru - which Singapore traded $5.9 billion in goods with last year.
Highlighting the importance of connectivity between Singapore and the alliance of the four Latin American nations at the 14th Pacific Alliance Summit, Senior Minister of State for Trade and Industry Chee Hong Tat said an FTA between both parties opens investment opportunities across a range of sectors.
While Singapore already has FTAs with three of the four countries in the alliance, an eventual FTA with the grouping "will provide an additional platform for Singapore to engage with... the Pacific Alliance as a group", said the Ministry of Trade and Industry in a statement on Saturday (July 6).
"There will also be market access benefits from Colombia, with whom we do not have a trade agreement," the ministry added.
Existing FTAs that Singapore is signatory to include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, an agreement between 11 countries including Chile, Mexico and Peru, as well as the Trans-Pacific Strategic Economic Partnership between four Pacific Rim countries, Brunei, Chile, Singapore and New Zealand.
Singapore also has an FTA with Peru, which has been in force since 2009.
Speaking at a high-level business seminar on his three-day trip to Peru ending on Saturday, Mr Chee flagged potential for partnerships between businesses in Singapore and the Pacific Alliance countries as well.
These lie in areas such as food, modern services, infocomm technology and urban solutions.
He also encouraged companies in the alliance, which comprises 210 million people and has a combined gross domestic product of US$4.05 trillion, to consider Singapore a base from which to enter markets in Asia and South-east Asia.
"As a trusted and well-connected hub in South-east Asia, Singapore can play a role in facilitating more collaboration, trade and investments that will benefit businesses from both regions," said Mr Chee.
Mr Thomas Pek, managing director of Tai Hua Food Industries, said he is supportive of an FTA with the Pacific Alliance countries, adding that favourable trade terms can help more Singapore companies venture out while keeping their product cost competitive.
The food manufacturer has been exporting soy sauce to Mexico since 2006 and has seen year-on-year increases in exports since then.
Mr Patrick Zhang, chief executive of SunMoon Food Company, which sources for seasonal fruits to be exported, added: "The Pacific Alliance market provides a good mixture of seasonal and evergreen supplies of agricultural products."
About 23 per cent of its business involved trade with Mexico in the company's last financial year. It started sourcing from Mexico from 2017 and the amount of goods the company buys from the country has risen almost 40 per cent over the years.
Besides avocados, which are in supply year-round in Mexico, SunMoon has also been looking into other fruits such as cherries, grapes and blueberries.
"By working closely with suppliers in the market, we are able to provide YiGuo Group, a fresh-food supply chain platform, with a substantial volume of fruits for the China market," said Mr Zhang, who noted the huge potential in the Pacific Alliance market.
Apart from opportunities in food, Mr Wong Heang Fine, group chief executive of infrastructure consultant Surbana Jurong, said his company is also "well-positioned to support South America in its development plans".
In April, Surbana announced it was appointed as master planners for Mexico's interoceanic corridor, as well as two economic development areas there.
"We hope to offer our experience to support the region's economic and social growth through infrastructure development," he said.