TRADE IN SINGAPORE
A Free Trade Agreement (FTA) is a legally binding agreement between two or more countries to reduce or eliminate barriers to trade, and facilitate the cross border movement of goods and services between the territories of the parties.
Since the signing of her first FTA under the ASEAN Free Trade Area (AFTA) in 1993, Singapore’s network of FTAs has expanded to cover 18 regional and bilateral FTAs with 24 trading partners. Singapore’s FTAs have been instrumental in helping Singapore-based businesses strengthen cross-border trade by eliminating or reducing import tariff rates, providing preferential access to services sectors, easing investment rules, improving intellectual property regulations, and opening government procurement opportunities.
ASEAN was first formed in 1967 with six member countries: Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand and was subsequently joined by Cambodia, Laos, Myanmar and Vietnam. The first six members are commonly referred to as the ASEAN 6 while the latter four entrants are common known as the CLMV countries. The ASEAN member countries also signed an agreement on the Common Effective Preferential Tariff (CEPT) scheme in 1992 to eliminate tariffs and non-tariff barriers in the region. This agreement was subsequently updated in 2003
On May 17, 2010, ASEAN Trade in Goods Agreement (ATIGA) entered into force, upon the notification of the ratification of all ASEAN Member States. The ATIGA is an enhancement of the CEPT-AFTA into a more comprehensive legal instrument. With this, certain ASEAN agreements relating to trade in goods, such as the CEPT Agreement and selected Protocols would be superseded by ATIGA.
Singapore was also one of the original signatories of the Trans-Pacific Partnership (TPP) agreement along with New Zealand, Chile and Brunei in July, 2005. The TPP now includes the United States, Australia, Peru, Vietnam and Malaysia and these nations are aiming to conclude a high-standard regional trade agreement focusing on the Pacific economies. Singapore also commenced negotiations towards FTAs with Colombia and Taiwan in the first half of 2011.
Meanwhile, Singapore’s minister for trade and industry, Lim Hng Kiang, and the European trade commissioner, Karel De Gucht, met in July, 2011, to take stock of the negotiations on the EU-Singapore Free Trade Agreement (EUSFTA). The focus was on further improving access to each other’s markets for goods and service providers, as well as strengthening trade rules on issues such as intellectual property protection and rules of origin. Seven rounds of negotiations have been held since March, 2010 and a comprehensive FTA is expected by this year end.
BANKING AND FINANCE
Singapore is a well established and diversified financial sector. In just over four decades, Singapore has established a thriving financial centre of international repute, serving not only its domestic economy, but also the wider Asia-Pacific region and in some instances, the world. Singapore’s financial centre offers a broad range of financial services including banking, insurance, investment banking and treasury services.
A key aspect of Singapore’s financial centre is its deep and liquid capital markets. With one of the more well-established capital markets in Asia-Pacific, the Singapore Exchange (SGX) is the preferred listing location for more than 200 global companies. Today, Singapore has grown to be the largest real estate investment trust market in Asia (excluding Japan) and also provides an extensive offering of investments in business trusts of shipping, aviation and infrastructure assets.
Singapore’s bond market has also grown significantly. With an extensive range of both Singapore government securities and foreign corporate bonds available, Singapore offers fixed income investors a wide range of investment opportunities.
As one of the top five most active foreign exchange trading centres in the world, Singapore is also the second largest over-the-counter derivatives trading centre in Asia, and a leading commodities derivatives trading hub.
With total assets under management of around S$1 trillion, and which continues to see steady growth, Singapore is also recognised as one of the premier asset management location in Asia.