New Pacific Alliance-Singapore trade pact creates opportunities for growth, jobs and prosperity: PM Lee

THE new free trade agreement (FTA) between Singapore and the Pacific Alliance will propel greater cross-Pacific links and grow the partnership between both sides further, Prime Minister Lee Hsien Loong has said.

In a pre-recorded speech at the Pacific Alliance Summit on Wednesday (Jan 26), he said the signing of the deal - known as the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) - is a "strong message of hope and opportunity" as the world continues to grapple with the Covid-19 pandemic.

The Pacific Alliance is a Latin American trade bloc formed by Chile, Colombia, Mexico and Peru, which all border the Pacific Ocean.

The FTA was signed at the summit in Colombia by Singapore's Trade and Industry Minister Gan Kim Yong and his counterparts from the Pacific Alliance. With the signing of the PASFTA and the Pacific Alliance-Singapore joint declaration, Singapore will become first Associate State of the Pacific Alliance.

"(PASFTA) demonstrates our shared commitment to improve the lives of people in both our regions. It generates new opportunities for growth, jobs and prosperity in the post-pandemic global economy," said PM Lee in his remarks.

"It assures businesses that their forays into our respective markets will be underpinned by a conducive trade architecture. It fosters further cooperation in areas such as e-commerce, customs and trade facilitation, and maritime services."

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He added that the FTA will "institutionalise and strengthen" the economic links of the 5 countries involved.

"It should deepen cooperation with the Pacific Alliance in areas of common interests and foster closer ties between us. We look forward to working with the Pacific Alliance to enhance our roles as nodes in our respective regions, to encourage greater interactions and collaborations."

The Pacific Alliance currently accounts for one-third of Singapore's total trade and investment with Latin America and the Caribbean.

PM Lee noted that more than 100 Singapore companies do business in Pacific Alliance countries, in sectors such as trade, technology and innovation, and infrastructure.

Firms like Tee Yih Jia Food Manufacturing and Taiger have ventured into other Latin American countries using the Pacific Alliance as their base. Some of the largest companies in the Pacific Alliance, such as Ecopetrol, Codelco, Cemex, have all established a commercial presence in Singapore.

"We hope that more companies from the Pacific Alliance will follow, and use Singapore as a gateway to uncover markets and seize business opportunities in our region," said PM Lee.

Each country will now work on its ratification process to bring the agreement into force. The PASFTA will enter into force after Singapore and at least 2 Pacific Alliance member states have ratified the agreement.