UK-Singapore free trade agreement to take effect on 1 January

Staff Writer, Singapore
·Editorial Team
·2-min read
A boat leaves the pier past the Pasir Panjang container port terminal Singapore on November 11, 2020. (Photo by Roslan RAHMAN / AFP) (Photo by ROSLAN RAHMAN/AFP via Getty Images)
Pasir Panjang container port terminal in Singapore (PHOTO/AFP via Getty Images)

SINGAPORE — The UK-Singapore free trade agreement (UKSFTA) will take effect from 1 January 2021, 7am Singapore time, the Ministry of Trade and Industry said on Thursday (31 December).

The EU-Singapore Free Trade Agreement (EUSFTA) will then cease to apply to UK-Singapore trade.

After the signing of the UKSFTA on 10 December, the two countries completed the respective domestic procedures for the agreement’s provisional application. This will continue until the UKSFTA is ratified by both countries and takes effect.

The UKSFTA ensures trade continuity and provides companies with certainty in trading arrangements between the UK and Singapore. It will allow companies to continue enjoying the same EUSFTA benefits for bilateral trade.

Among the benefits are tariff elimination for goods trade, increased access to services and government procurement markets, as well as reduction of non-tariff barriers in four major sectors: electronics; motor vehicles and vehicle parts; pharmaceutical products and medical devices; and renewable energy generation.

Upon the UKSFTA taking effect, tariffs will remain eliminated for 84 per cent of all tariff lines for Singapore exports to the UK. Almost all of the remaining tariffs will be eliminated by 21 November 2024. Singapore will continue to bind its current level of duty-free access under the EUSFTA for all UK products entering Singapore.

Singapore companies will continue to enjoy enhanced market access in the UK for Asian food products made in the Republic, such as har gow (prawn dumplings) and sambal ikan bilis (spicy crispy anchovies). These will be able to enter the UK tariff-free under flexible rules of origin, up to a total annual quota of 350 tons.

The UKSFTA also provides enhanced market access for the services sectors, and creates a level-playing field for businesses in each other’s markets, ranging from architecture, engineering, management consultancy, advertising to restaurants services.

On 24 December, the UK and the EU reached a Brexit trade deal after nine months of talks. From January, trade in goods between the two markets will be more burdensome with the UK leaving the EU customs union and single market. While there will not be any tariffs or restrictive quotas under the deal, trade flows will be subject to new customs and regulatory checks.

(ILLUSTRATION: UK-Singapore Free Trade Agreement overview/Ministry of Trade and Industry)
(ILLUSTRATION: UK-Singapore Free Trade Agreement overview/Ministry of Trade and Industry)

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