Forum: S’pore and Mercosur agreement set to boost trade and investment flows
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Singapore and the four founding countries of Mercosur – Argentina, Brazil, Paraguay and Uruguay – signed a free trade agreement (FTA) on Dec 7 in Rio de Janeiro, Brazil.
The Mercosur-Singapore Free Trade Agreement (MCSFTA) was signed during the 63rd Summit of Heads of State of Mercosur and Associated States.
Mercosur (“Southern Common Market”) was founded in 1991 as a regional political and economic integration organisation in a region of peace and democracy. Together, its four founding countries have more than 295 million inhabitants of diverse cultures and constitute the fifth-biggest economy in the world.
Mercosur sprawls over 14,869,775 sq km covering diverse ecosystems, both continental and maritime, with one of the biggest biodiversity reserves in the world.
Mercosur has privileged natural conditions for agriculture, animal farming and fishing and a huge amount of energy resources, both renewable and non-renewable. It also holds one of the biggest freshwater reserves in the world and abundant mineral resources.
By signing this MCSFTA, Singapore and Mercosur reaffirm their commitment to strengthen and diversify their trade and investment relations, through lower tariffs, trade facilitation measures and clearer investment conditions, amongst other measures.
This is the first trade agreement signed by Mercosur with an Asean member country.
The MCSFTA will strengthen Singapore’s role as a gate of entry for Mercosur countries’ exports into South-east Asia. Also, Singapore is an attractive market in itself for Mercosur.
Singapore is also a major global investor, and it is expected that the MCSFTA will continue to attract investment capital from Singapore to Mercosur’s many investment opportunities.
With this MCSFTA, Singapore will continue to diversify and deepen its supply chain options in Mercosur countries, enhancing its food and energy security.
The MCSFTA will improve the global competitiveness of companies of both parties, which will contribute to economic and social development and to creating new employment opportunities, while guaranteeing appropriate levels of environmental protection.
For Mercosur countries, this MCSFTA is the latest achievement in the journey of extra-regional trade networking that its founding members started more than 15 years ago, and which also led to the signing of FTAs with Israel (2007) and Egypt (2010), and Preferential Trade Agreements with India (2009) and the South Africa Customs Union (2016).
Within South America, Mercosur has FTAs with Chile, Bolivia, Peru, Colombia, Ecuador and Mexico.
Mauricio Nine
Argentine Ambassador to Singapore
Eugênia Barthelmess
Brazilian Ambassador to Singapore
