Singapore and UK sign FTA; to work towards a digital economy agreement

SINGAPORE and the UK have signed the UK-Singapore Free Trade Agreement (FTA) on Thursday. The countries have also agreed to start scoping the modules of a UK-Singapore Digital Economy Agreement (DEA), with a view to launch negotiations next year.

Under this FTA, Singapore and UK companies will enjoy the same benefits that they are receiving under the EU-Singapore FTA (EUSFTA), the Ministry of Trade and Industry (MTI) said in a press statement on Thursday.

MTI said earlier this year that the EUSFTA will continue to apply to the UK during the Brexit transition period, with Singapore and the UK also working on an agreement to maintain trade continuity after the transition period ends.

"The UK-Singapore FTA will provide Singapore and UK companies with certainty and clarity in trading arrangements between both countries," MTI said on Thursday.

In a joint ministerial statement on Thursday, the countries said the UK-Singapore FTA will cover more than £17 billion (S$30.39 billion) of bilateral trade in goods and services.

The statement added that companies will continue to benefit from tariff elimination for goods trade, increased access to the respective services and government procurement markets, and reduction of non-tariff barriers in key sectors. These sectors include electronics, motor vehicles and vehicle parts, pharmaceutical products and medical devices, and renewable energy generation.

The FTA was signed by Singapore's Minister for Trade and Industry Chan Chun Sing, and UK Secretary of State for International Trade Elizabeth Truss in Singapore.

"The signing of the UK-Singapore FTA strengthens and deepens the relationship between Singapore and the UK," Mr Chan said. "The agreement will 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."

The two countries are also planning to strengthen their trading relationship, and will start scoping modules for a UK-Singapore DEA, with the aim of launching negotiations in early spring next year.

The DEA will facilitate more seamless digital trade and business between the UK and Singapore by promoting cross-border digital connectivity and interoperability of digital standards and systems, MTI said.

Mr Chan added: "Our intention to launch negotiations on a pioneering DEA between the UK and Singapore early next year also reflects both countries' desire, as forward-looking and digitally advanced economies, to set the template for digital trade rules of the future."

The two countries have also committed to commence negotiations on a high standard investment protection agreement within two years of the UK-Singapore FTA's entry into force. They will endeavour to conclude the negotiations within four years of the FTA's entry into force.