The UK and Singapore have signed a free trade deal, offering minimal positive news for Boris Johnson’s government as it remains locked in negotiations with the EU over its future relationship with the bloc.
Liz Truss, the United Kingdom’s international trade secretary, on Thursday signed the agreement with her Singaporean counterpart Chan Chun Sing in the city-state.
The new deal covers more than £ 17 billion in trade in goods and services and largely replicates the existing FTA between the EU and Singapore, the governments said in a joint statement. Under the current deal, 84% of tariffs that apply to Singapore’s exports to the UK are exempt, with the balance to be waived by November 2024.
Singapore would maintain the level of duty-free access granted under the current arrangement.
The FTA – which the two countries aim to implement after the Brexit transition period ends on December 31 – is the first between the UK and a member of the Association of South Asian Nations -Is the 10-country trade bloc which also includes countries like Indonesia. , Thailand, Malaysia and the Philippines.
Mr Chan said the deal “would provide continuity and certainty for businesses in both countries and send a strong signal of the UK’s commitment to deepen engagement in the region”.
Ms Truss said the deal was “part of a much larger strategic investment for the UK, bringing us closer to joining Singapore” in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a regional trade agreement.
Joining the CPTPP would enhance the UK’s “economic security”, diversify supply chains and strengthen the “global consensus for rules-based free trade,” she added.
Peter Mumford, Head of South East and South Asia at Eurasia Group, the consultancy firm, said the trade agreement with the pact signed by the United Kingdom with Japan in October were “stepping stones” for potential membership in the CPTPP.
“Getting new trade deals where there is no deal with the EU may take a little longer, but the UK’s goal is certainly to expand its network of FTAs across the country. ‘Southeast Asia,’ he said.
Chan said “Singapore supports and welcomes” UK interest in joining the CPTPP, which involves countries such as Japan, Canada and Australia.
Singapore is the UK’s largest trading and investment partner in Asean, while Britain is the city-state’s top investment destination in Europe.
The UK government and the EU extended the deadline until Sunday for negotiations on a final settlement between the parties after the end of the Brexit transition period. The move follows a meeting between Mr Johnson and Ursula von der Leyen, the president of the European Commission, which revealed continuing differences between the two sides.
Singapore and the UK also agreed on Thursday to start negotiations for a “digital economy deal” next year to facilitate cross-border digital trade. An agreement would be the first such agreement between Singapore and a European country.
Last month, the leaders of 15 Asia-Pacific countries sealed the Comprehensive regional economic partnership, one of the largest trade agreements in history which took most of the existing agreements signed by the 10 ASEAN members and combined them into a single multilateral pact with Australia, China, Japan, New Zealand and South Korea.