Negotiations have been concluded between Singapore and the Pacific Alliance, a trading bloc of four Latin American nations, on an agreement to collaborate on energy, digital economy, infrastructure and urban solutions, port management and logistics, and other areas.
The free trade agreement (FTA) was welcomed by Trade and Industry Minister Gan Kim Yong and ministers of Chile, Colombia, Mexico and Peru in a videoconference on Wednesday.
Mr Gan said the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) is significant in that it is Singapore's first FTA with Colombia, and establishes a modern, comprehensive, high-quality and mutually beneficial economic partnership that builds on existing agreements between the alliance and Singapore.
"This agreement complements Singapore's existing bilateral and plurilateral links with each (Pacific Alliance) country, including the Trans-Pacific Strategic Economic Partnership Agreement, Peru-Singapore FTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)," he was quoted in a statement issued yesterday by the Ministry of Trade and Industry.
The FTA represents a shared commitment by the alliance and Singapore to persevering with greater economic integration and supporting a rules-based multilateral trading system, Mr Gan said.
"It sends a powerful message to the global community that our countries remain open for business and, despite the pressures placed on economic multilateralism, we want to reach out to one another and create more opportunities for our people," he said.
He added that both sides wish to build on this foundation to grow further links and generate opportunities for people and businesses.
The Pacific Alliance is the eighth-largest exporter in the world, with a combined population of 230 million, and per capita gross domestic product of US$19,000 (S$25,900). It is also the eighth-largest economy worldwide,drawing 56 million tourists, representing 41 per cent of the GDP of Latin America and the Caribbean, and accounting for 38 per cent of its foreign direct investment.
In 2019, Singapore's total trade in goods with the Alliance was $6.1 billion, or around a third of its total trade in goods with Latin America. Singapore became an observer state of the Pacific Alliance in 2014, and a candidate associate state in 2017. It already has existing agreements with three of the four alliance countries - Chile, Mexico and Peru - which are member states of the CPTPP.
Colombian Minister of Trade, Industry and Tourism Maria Ximena Lombana said the trade pact marks a milestone in the alliance's economic integration with the Asia-Pacific region. Singapore will become its first associate state when the pact is signed.
"With this new agreement... we are embarking on the path of improving our commercial relationship, attracting investments, expanding market access of goods and boosting access for service suppliers in a wide range of sectors," she said.
"Reaching Singapore's market allows us to use regional inputs from different countries, which will enhance productive regional chains. We expect to attract Singaporean investors... as a productive and export platform to the region."
She said both sides can explore areas for collaboration on technology and digital economy, and noted that Singapore has suggested exploring a Digital Economy Partnership Agreement with the four countries.
The two sides are working towards formally signing the PASFTA during the Pacific Alliance Summit in December in Colombia.