Singapore Signs Free Trade Agreement with Latin American Bloc To Boost Trade

Singapore Signs Free Trade Agreement with Latin American Bloc To Boost Trade

Singapore has inked a historic free trade agreement (FTA) with four South American countries—Argentina, Brazil, Paraguay, and Uruguay—a group known by the Spanish acronym Mercosur. This marks Singapore’s first trade pact with these nations and Mercosur’s first such deal with a South-east Asian nation.

The Mercosur-Singapore Free Trade Agreement (MCSFTA) aims to facilitate increased trade by reducing tariffs and establishing transparent investment conditions.

The agreement, signed at the 63rd Summit of Heads of State of Mercosur and Associate States in Rio de Janeiro, Brazil, targets enhanced entrepreneurship, accelerated digitalization, sustainable development, and food supply security. The deal is expected to benefit small and medium-sized enterprises (SMEs) across the five economies.

The accord, a result of over four years of negotiations, was signed by Foreign Minister Vivian Balakrishnan and ministers from the Mercosur nations. The focus is on streamlining customs procedures, boosting investor confidence, facilitating digital trade, and supporting SME internationalization.

The signatories will now move forward with domestic ratification processes to implement the agreement. Dr. Balakrishnan highlighted the significance of the MCSFTA, describing it as a bridge between Southeast Asia and South America, bringing the regions closer together.

The pact expands Singapore’s trade relations with Latin America, fostering economic opportunities and collaboration in various sectors, including e-commerce, agri-trade, and government procurement. The Mercosur bloc collectively represents the world’s eighth-largest economy, with a combined GDP of $2.7 trillion and a market of 272 million people.