The UK and Singapore have signed a free trade agreement, delivering a modicum of positive news for Boris Johnson’s government as it remains locked in negotiations with the EU over its future relationship with the bloc.
Liz Truss, the UK’s international trade secretary, signed the agreement with her Singapore counterpart Chan Chun Sing in the city-state on Thursday.
The new deal covers more than £17bn of trade in goods and services and largely replicates the existing EU-Singapore FTA, the governments said in a joint statement. Under the current arrangement, 84 per cent of tariffs that apply to Singapore exports to the UK are exempted, with the balance set to be struck off by November 2024.
Singapore would maintain the level of duty-free access for UK goods granted under the current EU arrangement. British exporters enjoy largely tariff-free access to Singapore, where more than 99 per cent of imports are exempt of duties.
The FTA — which the two countries aim to implement after the Brexit transition period ends on December 31 — is the first between the UK and a member of the Association of Southeast Asian Nations, the 10-nation regional bloc that also includes countries such as Indonesia, Thailand, Malaysia and the Philippines.
Mr Chan said the deal would “provide continuity and certainty for businesses in both countries and send a strong signal of the UK’s commitment to deepen its engagement of the region”.
Ms Truss said the agreement was “part of a much wider strategic investment for the UK, taking us a step closer to joining Singapore” in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a regional trade deal.
Joining the CPTPP would boost the UK’s “economic security”, diversify supply chains and strengthen the “global consensus for rules based free trade”, she added.
Peter Mumford, head of south-east and south Asia at Eurasia Group, the consultancy, said the trade deal along with the pact the UK signed with Japan in October were “stepping stones” for potential membership to the CPTPP.
“Getting new trade agreements where there aren’t EU deals may take a bit longer, but certainly the UK’s goal is to expand its network of FTAs across south-east Asia,” he said.
Mr Chan said “Singapore supports and welcomes” the UK’s interest in joining the CPTPP, which involves countries such as Japan, Canada, and Australia.
Singapore is the UK’s largest trade and investment partner in Asean and Britain is the city-state’s top investment destination in Europe.
Ms Truss will travel to Vietnam to conclude a rollover trade agreement between the countries.
The UK government and the EU extended the deadline to Sunday for negotiations over a final settlement between the parties after the end of the Brexit transition period. The decision followed a meeting between Mr Johnson and Ursula von der Leyen, the European Commission president, that revealed gaps remained between the two sides.
Singapore and the UK on Thursday also agreed to start negotiations for a “digital economy agreement” next year to help facilitate cross-border digital trade. A deal would be Singapore’s first such arrangement with a European country.
Leaders from 15 Asia-Pacific nations last month sealed the Regional Comprehensive Economic Partnership, one of the largest trade deals in history which took most of the existing agreements signed by Asean’s 10 members and combined them into a single multilateral pact with Australia, China, Japan, New Zealand and South Korea.
Source: Economy - ft.com
