SINGAPORE - Britain and Singapore signed a free trade agreement (FTA) on Thursday (Dec 10), providing businesses from both jurisdictions more certainty and clarity in trading arrangements, said the Ministry of Trade and Industry.
Under the United Kingdom-Singapore FTA, British and Singapore firms will enjoy the same benefits that they are receiving under the European Union (EU)-Singapore FTA, including tariff elimination for goods trade and increased access for government procurement markets.
Here is a look at the key benefits for Singapore businesses under the UK-Singapore FTA, which will kick in on Jan 1, 2021:
1. Tariff elimination, enhanced market access
The UK-Singapore FTA will maintain the same timeline for tariff reductions as the EUSFTA. This means that 84 per cent of Singapore exports entering Britain will continue to be duty-free once the UK-Singapore FTA enters into force.
These include Asian food products, electronics, pharmaceuticals and petrochemicals.
By Nov 21, 2024, tariffs on virtually all remaining products will be eliminated, such as on textiles, fruits and selected meat and seafood produce.
Liberal and flexible rules of origin for the UK and Singapore's key exports to each other's markets, such as automobiles, chemicals, electronics and pharmaceuticals, will continue to be provided for.
Asian food products made in Singapore will continue to enjoy enhanced market access. For example, products such as har gow (prawn dumplings) and sambal ikan bilis (spicy crispy anchovies) will be able to enter the UK tariff-free, up to an annual combined quota of 350 tonnes.
2. Enhanced market access in services sectors
The FTA provides for enhanced market access for service providers, professionals and investors, creating a level playing field for businesses in both the UK and Singapore.
This includes sector-specific rules on non-discrimination and transparency.
A wide range of services sectors are covered under the agreement, including architecture, engineering, management consultancy, international maritime transport as well as hotel and restaurants services.
Standard Chartered Singapore, for instance, will be entitled to additional customer service locations under the FTA, the bank said on Thursday. This comes on top of the 50 locations which it is already entitled to as a "Significantly Rooted Foreign Bank", a framework under which it is accorded enhanced privileges.
3. Investment protection, enhanced IP rights
Singapore and the UK have committed to start negotiations for a high standard investment protection agreement within two years of the FTA coming into force, and aims to conclude the negotiations within four years.
The FTA also allows Singapore and the UK to continue enjoying a comprehensive Intellectual Property Rights Chapter which covers copyright, enforcement and geographical indications.
4. Reduced non-tariff barriers, lower costs for exports
The UK-Singapore FTA will remove unnecessary technical barriers to trade for Singapore and UK exporters, facilitating trade and creating a level playing field for firms in both jurisdictions.
Duplicative testing and certification procedures would be reduced, lowering operational costs for exporters.
Sectors that could benefit include electronics, motor vehicles and vehicle parts, pharmaceuticals, renewable energy, as well as meat and meat products.
5. Government procurement opportunities
Singapore will be granted enhanced access to city-level and municipal-level government procurement opportunities in the UK, which means that firms here can bid for more government projects in the UK.
Firms that could benefit include those in transport, financial services and utilities.