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[SINGAPORE] Singapore and Taiwan have inked an economic partnership agreement which, once fully implemented, will eliminate import duties and taxes for almost all of Singapore's exports there.
In addition to liberalising trade in goods and services, the agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP) also covers areas like investment, dispute settlement, e-commerce, government procurement, and customs procedures.
ASTEP is Taiwan's first economic partnership agreement with an Asean country, and also its first agreement with one of its top 10 trading partners.
Minister for Trade and Industry, Lim Hng Kiang, called ASTEP a "high-standard and comprehensive agreement" that will strengthen the economic relations between both sides.
Said Mr Lim: "Companies from both sides are already actively pursuing business opportunities in each others' economies. The agreement will further enhance and deepen trade and investment flows between both sides."
In providing preferential tariff access to Singapore exporters, ASTEP - signed yesterday morning - offers companies here a competitive advantage in a market of 23 million people.
Approximately 97 per cent of Singapore's current exports will qualify for immediate tariff free treatment, while the remaining 3 per cent will qualify at five, 10 or 15 years after ASTEP enters into force.
The Business Times understands that the exact date of ASTEP's implementation is not yet known.
It is expected that Singapore-based companies exporting to Taiwan - particularly those in the electronics, chemicals, pharmaceuticals, machinery, and processed food products sectors - will stand to benefit from the removal of tariffs.
Singapore is Taiwan's fifth-largest trading partner, with key traded products spanning electronic circuits, electrical machinery and organic chemicals.
The Republic's investment into Taiwan reached $5.9 billion in 2011 - making Singapore the territory's sixth-largest foreign investor.
In a statement released yesterday, the Ministry of Trade and Industry noted that Singapore is a regional headquarter and "a key South-east Asia hub" for many Taiwan companies seizing growth opportunities in the region.
Meanwhile, Taiwan is Singapore's eighth-largest trading partner. Bilateral trade between both sides rose 8.7 per cent from 2011 to reach $49.7 billion last year.
The territory is Singapore's sixth-largest source of investments from Asia, with a total foreign direct investment stock of $7.3 billion in 2011. Negotiations on ASTEP commenced in May 2011, and the agreement was signed yesterday in Singapore by the Trade Representative of the Singapore Trade Office in Taipei, Calvin Eu, and the Representative of the Taipei Representative Office in Singapore, Hsieh Fa-dah.