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Montevideo, March 3rd 2024 - 22:33 UTC

 

 

Singapore signs free trade agreement with Mercosur at the Rio summit

Saturday, December 9th 2023 - 11:00 UTC
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Minister for Foreign Affairs Dr Vivian Balakrishnan with Alberto Fernández, Santiago Peña, Lula da Silva, and Luis Lacalle Pou, at the signing ceremony for the Mercosur-Singapore FTA in Rio Minister for Foreign Affairs Dr Vivian Balakrishnan with Alberto Fernández, Santiago Peña, Lula da Silva, and Luis Lacalle Pou, at the signing ceremony for the Mercosur-Singapore FTA in Rio

The city-state of Singapore and a leading business and financial hub in Asia finally signed a free trade agreement with Mercosur during the South American countries summit held in Rio do Janeiro. It is Mercosur's first deal with a Southeast Asian nation.

For Singapore it was another agreement with Latin America since on January 2022 it signed a free trade agreement with the Pacific Alliance, which comprises Chile, Colombia, Peru and Mexico.

Singapore’s Ministry of Foreign Affairs and Ministry of Trade and Industry said the agreement with Mercosur aims to facilitate greater trade flows through lowered tariffs and by establishing transparent investment conditions. It will also foster cooperation in areas such as trade facilitation – a process that simplifies export and import procedures.

The pact known as the Mercosur/Singapore Free Trade Agreement, MCSFTA, was signed by the five countries that will now work on their domestic ratification processes to bring the new deal into force.

Singapore Foreign minister Vivian Balakrishnan present in Rio said, “This signing comes after more than four years of intensive negotiations. The MCSFTA creates a new bridge between South-east Asia and South America, bringing our regions closer together.”

He added that the countries will focus on enhancing trade through simplified Customs procedures and increased transparency, so that goods can be cleared more efficiently, as well as on enhancing stability and predictability to raise investor confidence. They will also work to facilitate digital trade and build up trust in the digital economy, and do so in a way that will give fair opportunities to all countries’ citizens.

Together with the Pacific Alliance deal, Singapore now has substantive FTAs with most of South America, he noted. Mercosur collectively represents the eighth-largest economy in the world, with a combined gross domestic product of US$ 2.7 trillion and a market of 282 million people.

Bilateral trade between Singapore and Mercosur in 2022 accounted for 45%, or US$13.8 billion, of Singapore’s total trade with the 33 independent economies in the Latin American region, while trade in services in 2021 accounted for 40%, or US$ 7.6 billion. Besides there are some 100 Singapore companies operating in the Mercosur markets, in sectors such as oil and gas, agri-business, digital solutions, manufacturing, hospitality, logistics and infrastructure.

In Rio Brazilian vice-president Geraldo Alckmin said, “this will be Mercosur first free trade agreement in over ten years and the first with an Asian country. This integration strengthens economic ties between Brazil, Mercosur, and the Asian region, creating opportunities for greater diversification of exports and investments”

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