Debated in Parliament on 6 Aug 2019.
Ms Anthea Ong asked the Minister for Trade and Industry (a) how many Free Trade Agreements (FTAs) does Singapore have as of today; (b) how many are in the pipeline to be signed/ratified and with whom; (c) whether the Ministry has conducted detailed studies of economic and social benefits of each or most of the bilateral and multiparty FTAs; and (d) if so, what are these benefits and how much change in trade has been seen after the FTA with each of the trade partners has been implemented.
Singapore currently has 24 Free Trade Agreements (FTAs). We are also working with the European Commission to bring the EU-Singapore FTA (EUSFTA), which was ratified by the European Parliament in February 2019, into force at the end of 2019.1 In addition, we are negotiating the Regional Comprehensive Economic Partnership (RCEP), which connects all ten ASEAN economies with six other economies accounting for about 30% of global Gross Domestic Product (GDP), as well as FTAs with the Eurasian Economic Union, MERCOSUR, and the Pacific Alliance.
Our trade and investment partnerships create opportunities for our economy and strengthen our strategic relations with other countries. A study by the Ministry of Trade and Industry (MTI) estimated that on average, Singapore's domestic exports to an FTA partner increased by 18% two years after its entry into force, and a further 16% in the third year.2 New agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EUSFTA can potentially increase Singapore's GDP by up to 0.2% and 0.35% respectively.3 Our FTAs also make it easier for our companies to do business in foreign countries by providing preferential market access for our businesses, including lower tariff and non-tariff barriers for Singapore goods, fewer restrictions for services sectors, and enhanced protection for investments.
Beyond market access benefits, FTAs also establish common enforceable rules that provide certainty for businesses. For instance, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership's (CPTPP) rules for intellectual property rights and e-commerce help attract research and development, and spur the growth of transformative digital services that we all enjoy today.
MTI regularly reviews our trade agreements to account for new business models and regulations. With the rapid growth of the digital economy, we have started negotiating digital economy agreements with Chile and New Zealand, as well as a collaboration with Australia. We also upgrade our FTAs in light of changing economic circumstances. For instance, we upgraded our FTA with China in November 2018, to provide our businesses with enhanced investment protection, greater access to China’s legal, maritime and construction services sectors, and improved Rules of Origin for petrochemical and plastics exports.
PAPERCUTS