Gulf Cooperation Council-Singapore Free Trade Agreement comes into force on Sept 1

The Gulf Cooperation Council-Singapore Free Trade Agreement (GSFTA) comes into effect on Sept 1.

The agreement will further enhance Singapore's growing economic relations and trade with the Gulf Cooperation Council (GCC), consisting of six countries in the Middle East - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), said the Ministry of Trade and Industry.

The GSFTA is a comprehensive free trade agreement covering trade in goods, trade in services, investments, rules of origin, customs procedures, government procurement, electronic commerce and economic cooperation.

Under the deal, some 95 per cent of all GCC tariff lines will qualify for tariff-free concessions.

An additional 2.7 per cent of tariff lines will qualify for the same tariff-free concessions by 2018.

Based on Singapore's latest bilateral trade figures in 2012, $3.98 billion worth of Singapore goods will qualify for immediate tariff-free treatment, while $49.1 million worth of Singapore goods will qualify after 2018.

Major sectors that will benefit from the elimination of tariffs are telecommunications, electrical and electronic equipment, petrochemicals, jewellery, machinery and iron and steel-related industries.

Singapore will grant zero-tariff treatment on all GCC imports with immediate effect.

Singapore is the first non-Middle East country to have an FTA with the GCC. It is Singapore's second with the Middle East, after the Singapore-Jordan FTA in 2004.

The GCC countries have committed to recognise the Singapore Muis Halal Standards (SMHS) as similar and consistent to their domestic Halal standards.

Four out of the six GCC countries have already committed to recognise SMHS and another two countries - Bahrain and Saudi Arabia - will start negotiations shortly to do the same.

This will open up more opportunities in Singapore's export of Halal products to the GCC states.

"The GSFTA coming into force will bring the strong bilateral and economic ties between Singapore and the six GCC economies to a new level," said Senior Minister of State for Trade and Industry Lee Yi Shyan.

"The GSFTA will further enhance Singapore's role as a Gateway City by connecting the two large regions of Asia and the Middle East & North Africa."

The GCC is currently Singapore's fifth largest trading partner and accounts for 35 per cent of Singapore's oil imports. Bilateral trade with the GCC reached a record high of $68.6 billion last year, an increase of 62 per cent since 2007.

Follow ST on LinkedIn and stay updated on the latest career news, insights and more.