Straits Times (Singapore) | Sep 5, 2008
Free trade accord reached
PM expected to sign wide-ranging pact in Beijing next month
By Tracy Quek, China Correspondent
TIANJIN: Singapore has become the first Asian country to conclude a comprehensive bilateral Free Trade Agreement (FTA) with China, a move that will boost economic and trade ties between the two countries even further.
Deputy Prime Minister Wong Kan Seng and Chinese Vice-Premier Wang Qishan yesterday announced the successful end to two years of FTA negotiations during the 5th meeting of the Joint Council for Bilateral Cooperation (JCBC).
The high-powered JCBC sets the agenda for economic cooperation between the two countries.
Both sides had held eight rounds of talks to hammer out the trade deal since negotiations began in October 2006. The eighth and final round of FTA talks took place from Monday to Wednesday in Beijing, even as high-level Singapore and Chinese delegations held separate meetings in Tianjin.
The formal signing of the pact is expected to take place next month when Prime Minister Lee Hsien Loong attends the 7th Asia Europe Meeting Summit in Beijing.
The deal is a ’major achievement’ and a ’new milestone’ in Singapore’s long and established relationship with China which took root before diplomatic ties were officially established in 1990, said DPM Wong.
Citing two bilateral flagship projects, the Suzhou Industrial Park (SIP) and the Tianjin eco-city, Mr Wong said: ’This long-term relationship has been concretised in many ways apart from growing markets and access...the FTA further strengthens our relations.’
The pact, he added, will result in ’liberalisation, the lowering of tariffs for many items, goods, services, investments, and so on’.
’With far better access to each other’s markets, lower duties and tariffs, the FTA will be beneficial to both sides. It is a win-win situation,’ he told reporters after a morning of meetings during which senior Singapore and Chinese officials discussed the FTA, the SIP and other issues.
For Singapore businesses, he added, there will be ’far better access to the Chinese market, therefore the FTA is a big plus for our businessmen doing business in China’.
The bilateral FTA builds on the Asean-China Free Trade Agreement ( ACFTA), said a statement from the Ministry of Trade and Industry yesterday.
The Asean-China FTA process began in 2002. Now, only the investment component remains to be settled. Agreements on goods and services have been reached.
The China-Singapore pact, which is broader in scope than the Asean-China accord, ’provides an impetus’ for the ACFTA to be concluded, said Mr Wong.
The Singapore-China FTA will cover a range of areas including trade in goods, trade in services, movement of people, investment, customs procedures, technical barriers to trade, food safety and economic cooperation, said the MTI statement.
Further details will be released after the formal signing of the deal.
Compared to a regional trade pact, a bilateral FTA could result in ’more gains for Singapore, as the commitment would be much deeper at the bilateral level’, said DBS Bank economist Irvin Seah.
China has seen rapid growth and is a magnet for foreign investments, he said, which means ’gaining a foothold there and having deeper and broader market access will benefit Singapore exporters tremendously’.
’Chinese companies are also looking outwards. Having this FTA will lay a solid foundation for us to attract Chinese investments,’ he added.
Companies, both in Singapore and China, welcomed the news.
One mainland company hoping for some goodies under the new FTA is Guangdong-based Dongguan Nuoweier Technology Company, which manufactures and exports welding and incision equipment used on ships to Singapore and Asia-Pacific countries.
Mr Li Baolei, its sales manager for the Asia-Pacific region, told The Straits Times: ’I’m sure the FTA will bring us some benefit. We hope mostly for favourable tariff policies.’