Pacific-Rim partners ink historic trade pact
Singapore companies, including small and medium-sized enterprises, will benefit from the historic deal that will ease trade in goods and services among a dozen Pacific-Rim nations that make up about 40 per cent of the global economy, the Ministry of Trade
After five-and-a-half years of negotiations, Singapore and 11 Trans Pacific Partnership (TPP) countries – the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Vietnam – successfully concluded negotiations for the Trans-Pacific Partnership on Monday.
“The TPP embodies what Singapore sees as the future of the Asia-Pacific. It will transform the region by reducing tariff and non-tariff barriers substantially for both goods and services, encouraging greater investment and addressing new trade challenges in the modern economy,” said Lim Hng Kiang, the trade and industry minister.
The TPP countries represent a large market for Singapore businesses, with a combined population of 800 million and gross domestic product of US$30 trillion, amounting to 40 per cent of global GDP.
They comprise some of Singapore’s biggest trading partners such as Malaysia, the US, Japan, Australia and Vietnam.
In 2013, they accounted for 30 per cent of Singapore’s goods trade, worth S$300 billion (Bt7.7 billion), and 30 per cent of foreign direct investment in Singapore, amounting to S$240 billion.
The TPP will boost trade and investment flows between TPP countries as well as integrate the region into a single manufacturing base and market, the ministry said.
Singapore companies will benefit from increased market access with all 11 other TPP countries.
The TPP will also put in place new and updated trade rules to assure Singapore investors and traders a more open, predictable and transparent environment in this fast-growing regional marketplace.
Robust and balanced rules to promote fair competition and good governance, encourage innovation and grow the digital economy will create more opportunities and allow Singapore-based companies to operate in the region with greater ease and confidence.
The 12 TPP countries will work intensively to tie up remaining details and produce the final text for public review. The countries will also begin their domestic approval processes to bring the TPP into force as soon as possible, the ministry added.
The Singapore Business Federation and the American Chamber of Commerce in Singapore (AmCham) in statements yesterday welcomed the trade agreement and expressed hopes it would be ratified quickly by the 12 participating nations.
“With global growth still below pre-financial crisis level, businesses need a comprehensive and ambitious TPP that could open up new opportunities, strengthen trade and investment rules, as well as improve business conditions in the region,” said Ho Meng Kit, CEO of the federation.
“More importantly, it could effectively help to address the ‘behind the border’ issues that many businesses face in today’s complex environment.
“Notably, the agreement has special provisions for SMEs that aim to help them integrate into the global supply chain and facilitate their business expansion. Addressing these issues will allow SMEs to invest, expand,” he said. “We also need to have insights on the details of the trade pact to better examine what are the benefits and implications for Singapore’s business community.”
The TPP is not an exclusive pact, but has provisions to allow other trading nations in Asia to join later. It serves as a pathway towards a free trade area for the Asia-Pacific, he said.
