The 1st January 2021 saw the ushering in of the UK-Singapore Trade Agreement, the UK’s first such trade agreement with a member of ASEAN.
The agreement, known by the abbreviation UKSFTA, ensures trade continuity between Singapore and UK following Brexit. This meant that the existing EU-Singapore Free Trade Agreement, EUSFTA, stopped applying to UK-Singapore trade and had become invalid.
The key aspects of the agreement are:
- Elimination of Tariffs – tariffs are eliminated for 84% of all tariff lines for all Singapore products entering the UK. As with EUSFTA, tariffs on virtually all remaining products will be removed by 21 November 2024.
- Reduction of Non-Tariff barriers – aims to reduce operational costs for both Singapore and UK exporters, and create a level playing field for companies from both countries. Sectors that will benefit include electronics, motor vehicles, vehicle parts, pharmaceuticals, renewable energy, and meat products.
- Enhanced Market Access to Services Sector – enhanced market access for service providers, professionals and investors, and will create a level playing field for businesses in each other’s markets. Services covered by the agreement include architecture, engineering, management consultancy, advertising, computer-related, environmental, postal and courier, maintenance and repair of ships & aircraft, international maritime transport, and hospitality services. The UKSFTA will also support financial services in trade and investment in both countries.
- Government procurement opportunities – The UK will grant Singapore improved access to government procurement opportunities. Therefore, more Singaporean companies can now bid and invest in more government projects in Britain. The financial services sector in particular is set to benefit, especially in regards to greater collaboration on cross-border know-your-customer (KYC) processes, skills development, green finance and cybersecurity.
- Liberal and Flexible ROO for Key Exports – the agreement provides for liberal and flexible ROO (Rules Of Origin) for the UK and Singapore’s key exports to each other’s markets, such as automobiles, chemicals, clothing and textiles, electronics, machinery, pharmaceuticals, and petrochemicals.
