EU-Singapore FTA will still apply to UK during Brexit transition: MTI

Singapore

A FREE trade agreement (FTA) between Singapore and the European Union (EU) will continue to apply to the UK during the Brexit transition period of Feb 1 to Dec 31, according to the Republic's Ministry of Trade and Industry (MTI).

The UK will formally leave the bloc on Jan 31 at 11pm London time.

During the transition period, the UK will be treated functionally as an EU member-state and remain a party to EU international agreements, MTI said in a statement on Thursday night. The EU and UK can also decide by July 2020 to extend the transition period for one or two years.

Meanwhile, Singapore and the UK are working on an agreement to maintain trade continuity after the transition period ends and the FTA no longer applies to the UK. The EU-Singapore FTA came into force last November.

Minister for Trade and Industry Chan Chun Sing said in MTI's statement: "For Singapore companies doing business in the UK, the transition period will provide certainty for continued trade between Singapore and the UK.

"We will continue our close cooperation with the UK to broaden and deepen our bilateral economic relations for the future," he said.

In a separate statement, Singapore Business Federation (SBF) chief executive Ho Meng Kit said on Friday that the transition period will give businesses on both Singapore and UK shores time to prepare for an independent UK regulatory environment.

However, the nature of the UK's post-Brexit relationship with the EU - along with the subsequent impact on the UK's domestic regulations affecting commerce, trade and investment - is still not defined.

"This uncertainty translates into risks over supply chain and investment decisions," Mr Ho noted.

Greater clarity on the UK's independent regulatory regime will help Singapore companies that are looking to plan and execute their market strategies there, he added.

That being said, the SBF believes Brexit's impact on the city-state's firms may be "muted", given that those operating in the UK are largely in the sectors of real estate, hospitality, investments and retail.

These companies have continued to operate "cautiously" and develop their businesses along their own trajectories, Mr Ho said. For instance, in the real estate sector, recent acquisitions of UK student accommodation assets were made by Singapore Press Holdings, Far East Orchard and Mapletree Investments.

The SBF is urging both Singapore and the UK governments to "ensure the protection of investment rights and assist any businesses impacted by developments", Mr Ho said.

Singapore companies that are interested to find out more about the EU-Singapore FTA may contact Enterprise Singapore.