(27-02-2024, 08:14 PM)Scythian Wrote: [ -> ]But Singapore has enjoyed the benefits of Export Credit financing on procurement of various assets..
Examples: big ticket items like Buses and Aeroplanes. Also tax concessions
Benefits of Free Trade Agreements
The FTA (Free Trade Agreement) is a legal agreement with regards to trading between two or more countries.
This agreement is supposed to eliminate or reduce the barriers to trade between the parties that signed the agreement. It is also supposed to encourage cross-border movement of services and goods between the territories of the parties who signed the agreement.
Singapore boasts of having 18 regional and bilateral FTAs with 24 trading partners.
· Eased the investment rules
· Improved the intellectual property regulations
· Opened government procurement opportunities.
The Free Trade Agreements helped the Singapore-based businesses in strengthening the cross-border trade.
Free Trade Zones in Singapore
Singapore’s transformation to a first-world economy has become possible due to the introduction of FTA alongside having an educated workforce and a transparent legal system. In Singapore, Free Trade Zones are the areas where traders can import, export and sell the goods without having to pay for the excise duties, customs or goods and services tax.
In Free Trade Zones, it is possible to store the goods temporarily before loading them onto a ship or aircraft for the exportation without requiring customs clearance. The Free Trade Zones allow warehousing, storing, transshipment, distribution and exportation of the goods.
The Free Trade Zones can be created via the declaration of Minister of Singapore. The name of each zone is published in the official gazette after the declaration. These zones are supervised by Singaporean Free Trade Authority that maintains, administers, and operates the Free Trade Zones. The following areas have currently been declared as Free Trade Zones in Singapore.
· Brani Terminal
· Tanjong Pagar Terminal and Keppel Terminal
· Keppel District Park
· Pasir Panjang Wharves
· Sembawang Wharves
· Jurong Port
· Changi Airport Cargo Terminal Complex
· Changi Airport Groups
· Singapore Freeport located in Airport Logistics Park
Types of FTA
There are 14 bilateral and 11 regional Free Trade Agreements (FTA) in Singapore.
· Bilateral FTA is an agreement between Singapore and a single trading partner.
· Regional FTA is signed between Singapore and a group of trading partners.
Bilateral FTA
· CSFTA (China-Singapore FTA)
· CECA (India-Singapore Comprehensive Economic Cooperation Agreement)
· European Union-Singapore Free Trade Agreement (EUSFTA)
· JSEPA (Japan-Singapore Economic Partnership Agreement)
· KSFTA (Republic of Korea-Singapore FTA)
· ANZSCEP (New Zealand-Singapore Comprehensive Economic Partnership Agreement)
· PSFTA (Panama-Singapore FTA)
· PeSFTA (Peru-Singapore FTA)
· SAFTA (Singapore-Australia FTA)
· SCRFTA (Singapore-Costa Rica FTA)
· SJFTA (Singapore-Jordan FTA)
· SLSFTA (Sri Lanka-Singapore FTA)
· TRSFTA (Turkey-Singapore FTA)
· USSFTA (United States-Singapore FTA)
Regional FTAs
· AANZFTA (ASEAN-Australia-New Zealand Free Trade Area)
· ACFTA (ASEAN-China Free Trade Area)
· AHKFTA (ASEAN-Hong Kong, China Free Trade Area)
· AIFTA (ASEAN-India Free Trade Area)
· AJCEP (ASEAN-Japan Comprehensive Economic Partnership)
· AKFTA (ASEAN-Republic of Korea Free Trade Area)
· AFTA (ASEAN Free Trade Area)
· CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
· ESFTA (EFTA-Singapore FTA)
· EAEUSFTA (Singapore-Eurasian Economic union)
· GSFTA (GCC-Singapore FTA)
· TPSEP (Trans-Pacific Strategic Economic Partnership)
Benefits of FTA
The Singapore-based businesses enjoy free or reduced import tariffs due to having Free Trade Agreements alongside gaining access to preferential markets. Singapore has also become an ideal destination for the investors who look for new business opportunities in Asia since the introduction of FTA. The main benefits of FTA differ from one agreement to another.
1. CSFTA Benefits
· More petrochemical exports qualify for preferential treatment due to improvement in ROO (Rules of Origin).
· Implementation of Electronic Origin Data Exchange System.
· Increased efficiency and predictability for traders in the following areas
o Release of goods
o Advance rulings
o Express shipments
· Enhanced investment protection standards with improved ISDS mechanism and compensation clause for investors.
2. EUSFTA Benefits
· Elimination of customs duties
· Flexible and liberal rules of origin for Singapore’s exports
· Improved access for Singapore-based businesses to a variety of services sectors in EU.
· Better opportunities in Government procurement
· Reduction of non-tariff and technical barriers in several important sectors
· Better protection of IPR
3. CECA Benefits
· Singapore businesses exporting manufactured products to India enjoy reduction or elimination of tariff
· 100% tariff-free entry into India for sweets/biscuits and selected digital devices or animal products.
· Investors can invest in Indian market with a higher level of security on tangible and non-tangible assets
· Service suppliers have privileged access to various services sectors in India, such as financial, engineering and tourism.
4. JSEPA Benefits
· More flexibility in ‘Rules of Origin’ for Singapore’s exports to Japan
· Elimination in tariff for almost 92% of all tariff-lines for the export of Singapore’s originating goods to Japan.
· Reduction in tariff for 1,340 agricultural products and for more than 26 plastics as well as petrochemical products.
· According to Mutual Recognition Agreements, there is no need for the duplicative testing of electrical/electronic equipment and telecommunications equipment in the market of Singapore or Japan.
· Singapore and Japan allow cross-border sales of collective investment products to the institutional investors.
· Singapore-based brokers have access to Japan-based clients in aviation, marine or transit insurance/reinsurance.
5. KSFTA Benefits
· Reduction/elimination of tariff across 91.6% of the tariff lines for Singapore’s originating exports to ROK.
· Reduction of technical barriers when trading electrical/electronic equipment and telecommunication products.
· Service industries have improved access to services market of ROK in Education, Logistics and Environmental sectors.
· Comprehensive commitments of KSFTA protect the investors and investments of Singapore and ROK.
6. ANZSCEP Benefits
· Flexible rules of origin for electronics/chemicals/pharmaceuticals/processed food.
· Improvement in trade facilitation and customs procedures.
o It reduces the transaction costs and time and streamlines administrative procedures.
· Updated framework for Mutual Recognition Agreements reduces technical barriers to trade.
· Food exporters benefit from having better market access and clearance for their exports due to having three IAs (Implementing Arrangements) between New Zealand and Singapore.
7. TRSFTA Benefits
· Elimination of tariff with improved market access
· The Rules of Origin benefit the exportation of electronics, chemicals, processed food or pharmaceuticals (manufactured in Singapore).
· Singapore exporters can claim for preferential tariff treatment on the basis of self-certification which time and lowers administrative costs.
· Better customs facilitation increased the efficiency and predictability for exporters
· Businesses and consumers benefit from -
o Non-discriminatory treatment of digital products
o Electronic transmissions that are free from customs duties
o Protection of personal data
There are several other Free Trade Agreements, such as USSFTA, AEC, ACFTA, AJCEP, CPTPP and GSFTA. These agreements also offer unique benefits for the exporters and importers of both parties that signed the agreement.