Mr Lim Ming Yan,
Mr Gan Seow Kee,
Colleagues from the Singapore Business Federation,
Ladies and Gentlemen,
1. Good morning. I am pleased to see many members of the business community here today. It is a measure of your keen interest in our internationalisation efforts, and the value proposition of our Free Trade Agreements (FTAs).
2. As we all know, the global economy continues to face profound challenges - geopolitical tensions, inflationary pressures, supply chain disruptions, anti-globalisation sentiments, and more recently, Russia’s invasion of Ukraine.
3. But amidst this uncertainty, we also see interesting opportunities. The pandemic has been a catalyst for digitalisation, across industries and especially among small and medium enterprises (SMEs). Climate change has heightened the focus on sustainability and the urgent need for action.
4. As we navigate these challenges and seek to seize these new opportunities, more than ever, trade remains integral to the survival and success of Singapore’s economy.
5. That is why MTI has embarked on the Trade 2030 strategy – to grow our trading volumes, widen the range of trading activities in Singapore, and expand our global trade network. From 2020 to 2030, we aim to grow our export value from S$805 billion to S$1 trillion, and double our offshore trade value to US$2 trillion. We want to benefit more from re-exports and transhipment flows, and to embed Singapore more deeply into global supply chains.
6. FTAs underpin our Trade 2030 strategy. They enhance Singapore’s trade connectivity and standing as a global trading hub. And we will further strengthen our trade foundations in three ways. First, by broadening the geographical coverage of our trade agreements. Second, by deepening existing partnerships through new initiatives such as digital and green economy agreements. Third, by working with likeminded partners in setting new standards that pave the way for wider adoption globally. Let me elaborate.
Expanding our geographical coverage
7. First, we seek to build our trade network at three levels – multilateral, regional or plurilateral, and bilateral. These reinforce one another as part of our larger trade strategy. At the multilateral level, we have worked with fellow members to strengthen and sustain the relevance of the WTO’s rules-based trading system.
a. For example, last September, we announced Singapore’s participation in the Joint Statement Initiative (JSI) on services domestic regulations, which represents over 90 per cent of world services. This would cut administrative costs and create a more transparent operating environment for services providers in foreign markets.
b. As co-convenors of the WTO’s JSI on e-commerce, we have urged members to intensify negotiations this year. The JSI on e-commerce will provide stability and predictability for businesses and consumers in the digital economy and we hope that it can be concluded soon.
8. Over the years, we have also forged an extensive network of 27 FTAs encompassing almost 90% of our total trade. This gains our companies easier access to a wider range of markets, and at more competitive prices.
9. Since the last FTA Day in 2020, we have concluded three more FTAs.
a. First, the Regional Comprehensive Economy Partnership (RCEP) agreement – the world’s largest FTA, comprising about 30% of global GDP and close to a third of the world’s population.
b. Second, the Pacific-Alliance Singapore Free Trade Agreement (PASFTA). The Pacific Alliance, comprising Chile, Colombia, Mexico and Peru, is the 8th largest economy in the world, accounting for 52% of Latin America and the Caribbean’s total trade. It is also significant that this Agreement establishes our first free trade links with Colombia. It is also Singapore’s first FTA with a chapter on international maritime transport services. So we are covering new ground geographically and in terms of sectoral coverage.
c. Third, the UK-Singapore FTA (UKSFTA). This was an important achievement for ensuring continuity in our longstanding and major trade relations with the UK after Brexit. The agreement has brought certainty to our economies and companies with the elimination of over 80% of our tariff lines for Singapore exports to the UK.
10. An example of a company that has benefitted from our growing network of FTAs is Prima Taste. Prima’s products are sold in over 40 countries, facilitated by preferential market access through our FTAs. With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Prima also enjoys reduced time-to-market, through the agreement’s trade facilitation provisions on customs procedures and sanitary requirements.
Moving beyond trade in goods and services to Digital and Sustainable Economy
11. The second thrust in our trade strategy is to deepen collaboration in new areas such as digitalisation and sustainability. Like FTAs for trade in goods and services, international cooperation on digitalisation and sustainability can generate new economic opportunities and value.
12. Singapore is among the first to recognise the growing digital trend and embark on initiatives to capitalise on this momentum. We have forged Digital Economy Agreements (DEAs) to enable the open and trusted use of data, and ultimately build confidence in digital systems. In this regard, our DEAs enable interoperable rules, standards and policies so that companies can engage in seamless cross-border digital trade. So far, we have concluded four DEAs with five countries – Australia, Chile, South Korea, New Zealand, and the UK – and they are already yielding benefits.
13. I encourage companies to leverage these agreements to digitalise their businesses. For example, DBS Bank, Emirates NBD and Standard Chartered have tapped on our DEA, and worked with IMDA, MAS and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market, to introduce the cross-border digital trade financing pilot. It uses IMDA’s TradeTrust framework to facilitate the transfer of electronic records between jurisdictions. Their experience is a good exemplar for other companies, and they will be sharing more in a later panel discussion.
14. With the urgent need for climate action and focus on sustainability, many nations, including Singapore, have made national commitments under the UNFCCC to reduce carbon emissions.
a. Businesses have recognised that burnishing their green credentials confers a competitive advantage. In the PwC 2021 Global Investor Survey, nearly 80% of the respondents said that environmental, social and governance issues (ESG) are key factors in their investment decisions.
b. Indeed, creating a sustainable economy need not be at odds with economic growth and trade expansion; in fact, the relationship can be symbiotic. Some of our current FTAs such as the CPTPP and EU-Singapore FTA already feature linkages between trade and sustainable development. Furthermore, Singapore is working on new Green Economy Agreements (GEAs). As a first-of-its-kind agreement, the GEA will serve as a strategic pathfinder that can contribute to building global capacity to address climate change.
c. We are committed to working with our businesses to seize opportunities in the green economy. Last October, Enterprise Singapore launched the $180 million Enterprise Sustainability Programme (ESP) to help local companies improve their energy efficiency and adopt more sustainable business practices. Sunseap, Ghim Li and KODA will be sharing how such government initiatives have helped businesses embrace sustainable practices, even as they benefit from international and bilateral cooperation such as GEAs.
Setting high standards and raising the bar with likeminded partners
15. The third thrust in our strategy is to aim for high and novel standards in our agreements. The consequential benefits, we believe, will have a strong demonstration effect, and in turn, galvanise other countries to adopt these standards and ultimately raise the global benchmark for trade rules.
16. The new agreements I have mentioned – like RCEP, CPTPP, JSIs on services regulation and e-commerce, and digital and green economy agreements – all reflect our ambition to set high-standard trade rules for the ultimate benefit of businesses and consumers.
a. In the CPTPP, our companies can bid for government projects which were previously closed to foreign bidders. The agreement also facilitates cross-border data flows through rules that prevent data localisation, protect companies against forced transfers of their technology for market access, and ensure that electronically transmitted products are free from import duties.
b. Our DEA with UK will foster greater bilateral cooperation in the field of digital identity, through mutual recognition and interoperability. In addition, the cybersecurity partnership supports both countries’ interest in addressing the international challenges, and promoting bilateral collaborations, in this fast-evolving field.
c. Green Economy Agreements seek to support the development and deployment of low-carbon solutions, through knowledge sharing, joint research and collaborations on low-emission solutions, low-carbon hydrogen and energy cooperation, as well as policy exchanges on rules and standards setting.
17. Taken together, the span, depth and innovative elements of Singapore’s trade agreements hold much promise for our businesses, and opportunities for our people. It is therefore essential that our companies fully understand and benefit from the full suite of our trade, digital and green economy agreements.
18. I want to urge all our companies, especially our SMEs, to tap on the capacity-building initiatives, such as the outreach sessions organised by SBF and ESG to reap the full benefits of our agreements. Other tools such as Enterprise Singapore’s Tariff Finder, a complimentary self-help online tool, and the Market Readiness Assistance (MRA) grant, provide specific information and consultancy services. They enable our companies to harness the opportunities created by our network of FTAs, DEAs and GEAs.
19. I want to conclude by assuring all of you of the government’s full commitment to continue to build Singapore’s international trade network, enable our companies to fully benefit from the resultant opportunities, and ultimately create good jobs for our people. The Ministry of Trade and Industry, and Enterprise Singapore will work with SBF and other stakeholders to walk this journey with you.
20. I look forward to further discussion on these topics, and wish all of you a fruitful day ahead. Thank you.