The Pacific Alliance (PA) and Singapore have concluded the negotiations for a Free Trade Agreement. The agreement was announced by the Trade Ministers of Colombia, María Ximena Lombana, Peru, Claudia Cornejo, and Mexico, Tatiana Clouthier, and the Foreign Affairs Minister of Chile, Andrés Allamand, as members of the Pacific Alliance; and Singapore’s Trade and Industry Minister, Gan Kim Yong, through a videoconference on July 21.
María Ximena Lombana, Trade, Industry and Tourism Minister of Colombia, in her capacity as Pro Tempore President of the Pacific Alliance, announced the conclusion of the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) negotiations and highlighted the strengthening of our trade ties with Singapore.
“This Free Trade Agreement is a milestone for the Pacific Alliance; it is a great step forward in our integration with the Asia-Pacific Region that will enable us to grant Singapore the status of the first Associate State of the Pacific Alliance. In 2017, the bloc launched negotiations with Singapore, Australia, New Zealand and Canada, as Candidate Associate States. The aim was to develop instruments for economic and commercial integration, stressing our commitment to effectively insert ourselves in the Asia-Pacific Region.”
She continued, “With this new Agreement between Singapore and the Pacific Alliance we are achieving this objective, improving our trade relations, attracting investment, expanding market access for goods, and boosting access for service providers in a wide range of industries. Gaining entry into the Singapore market allows us to use regional inputs from different countries, enhancing regional production chains. We expect to attract Singaporean investors to the extended market of the PA as a platform for production and exports to the region.”
The Alliance considers that being an Associate State is a mechanism for promoting free trade agreements and providing windows of opportunity for cooperation. “This instrument will allow us to explore areas for collaboration on technology and the digital economy, which may include linking Singapore’s national Single Window with those of PA countries, port and logistics management, infrastructure and urban solutions, energy collaboration and trade in food. Additionally, Singapore suggested that the Digital Economy Partnership Agreement (DEPA) is another initiative which it could explore with PA states, recognizing that it may bring tangible benefits for all the countries involved”.
“The Pacific Alliance and Singapore agree on the scope of free trade agreements, in the sense that they will bring greater growth and ensure sustainable economic development in the long term, and will also boost our trade and economic ties.”
Gan Kim Yong, Singapore's Trade and Industry Minister, said that “Singapore is honored to be joining the Pacific Alliance in announcing the conclusion of the Pacific Alliance-Singapore Free Trade Agreement. The PASFTA establishes a modern, comprehensive, high-quality, and mutually beneficial economic partnership that builds on existing agreements between the Pacific Alliance and Singapore. This agreement complements Singapore’s existing bilateral and plurilateral links with the various Pacific Alliance countries, including the Trans-Pacific Strategic Economic Partnership Agreement, the Peru-Singapore FTA, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It is significant that the PASFTA will be our first Free Trade Agreement with Colombia.”
“The PASFTA represents a joint commitment by the Pacific Alliance and Singapore to persevere with greater economic integration and to support the rules of the multilateral trading system. This agreement sends a powerful message to the global community that our countries remain open for business, and that, despite the pressures on economic multilateralism, we want to reach out to one another and create more opportunities for our people. We want to build on this foundation, grow our links yet further, and generate opportunities for our people and for business.”
“We agree with the Pacific Alliance that being an Associate State provides a platform for cooperation in various areas such as energy cooperation, trade in food, the digital economy, infrastructure and urban solutions, port management and logistics, and the linking of National Single Windows.”
The Pacific Alliance consists of Chile, Colombia, Mexico and Peru. Collectively, it has a combined population of 230 million, a per capita GDP of US$19,000 and exports of US$627 billion, making the Alliance the world's 8th largest exporter. In 2019, Singapore’s total trade in goods with the Pacific Alliance was 6.1 billion Singapore dollars (US$4.5 billion), representing 33.2% of our total trade in goods with Latin America.
The Pacific Alliance is also ranked as the world's 8th largest economy; it accounts for 41% of the total GDP of Latin America and the Caribbean, receives 38% of its foreign direct investment, and attracts 56 million tourists. Furthermore, both the World Competitiveness Center and Doing Business rank PA countries as the most competitive in the region.
Singapore became an Observer State to the Pacific Alliance in 2014, and a Candidate Associate State in 2017. This event fulfills the mandate issued in the presidential statement of the PA's Presidents and the Prime Minister of Singapore at the Santiago Summit last December.
Singapore and the Pacific Alliance will work towards formal signing during the Alliance Summit to be held in Colombia in December 2021. When the PASFTA has been signed, Singapore will become the first Associate State of the Pacific Alliance. The Pacific Alliance and Singapore look forward to using this platform to stimulate closer ties between their nations and greater economic cooperation in areas of mutual interest, such as infrastructure, digital technology and innovation, energy, and trade in food.