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Chinese Premier Wen Jiabao and Singaporean Prime Minister Lee Hsien Loong witnessed the signing of a bilateral free trade agreement, or FTA, between their countries on 23 October in Beijing. The China-Singapore Free Trade Agreement will take effect on 1 January 2009, after both parties have completed legislative requirements.
Singapore’s government said that it expects the FTA to enhance economic and political ties between the two countries, and that the deal will add momentum toward the establishment of a China-ASEAN free trade zone.
”China is one of the largest and fastest growing markets in the world. The agreement will enhance Singapore companies’ access to the vast Chinese market and further boost our excellent bilateral trade and investment relations,” the Singaporean government said in a statement.
The comprehensive trade pact, China’s first bilateral FTA with another Asian nation, covers trade in goods and services, rules of origin, trade remedies, sanitary measures, technical barriers to trade, customs procedures, economic cooperation and dispute settlement, among other things.
Under the agreement, tariffs will be eliminated on more than 85 percent of Singapore’s exports to China upon the FTA’s entry into force, with an additional 10 percent of goods made duty-free by the next year. According to a Chinese statement, in total, a zero-tariff policy on 97.1 percent of Singaporean imported goods will be realised before the start of 2012. Although 260 specific goods are to be excluded, key products to be covered by the agreement include petrochemicals, processed foods and electrical products.
In return, Singapore will eliminate all tariffs on Chinese exports when agreement comes into force.
Talks for the deal began in October 2006 following a China-Singapore Joint Expert Group study on the feasibility of an FTA between the two countries. Following eight rounds of negotiations, the talks concluded on 3 September this year.
According to the Singaporean Ministry of Trade and Industry, trade between the two countries reached US$ 62 billion in 2007. China is Singapore’s third-largest trade partner and largest investment destination, while Singapore is China’s eighth-largest trading partner.
Beijing is currently in free trade negotiations with Australia, Japan, South Korea, Russia and various central Asian states. At the regional level, Beijing is aiming to establish the world’s largest free trade area by negotiating a deal with the 10-member Association of Southeast Asian Nations.
ICTSD reporting; “China, Singapore sign free trade pact,” XINHUA, 23 October 2008; “Singapore signs free trade agreement with China,” ASIAONE, 23 October 2008; “China, Singapore sign free-trade pact: officials,” ASSOCIATED FRANCE PRESSE, 24 October 2008.
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[...] is China’s first bilateral trade agreement with another Asian nation, according to this article from ICTSD: Under the agreement, tariffs will be eliminated on more than 85 percent of [...]