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Britain on Thursday, December 10, signed a free-trade deal with Singapore, giving it a key foothold in Asia as it seeks to forge its own path after leaving the European Union, while talks on a post-Brexit EU agreement stumble.
The deal largely mirrors an existing EU-Singapore pact, and will cover about 17 billion pounds (US$22 billion) in bilateral trade.
It came as negotiations between Britain and the EU on a trade relationship following the end of this year’s post-Brexit transition period teeter towards failure.
The deal removes tariffs and gives both countries access to each others’ markets in services, as well as cuts non-tariff barriers in sectors ranging from electronics to pharmaceutical products, Singapore’s trade ministry said.
After the pact was signed, British Prime Minister Boris Johnson hailed a “fantastic trade agreement with Singapore.”
“This is an important part of our vision of the UK trading with a network of dynamic nations across Asia-Pacific,” he tweeted.
International Trade Secretary Liz Truss, in Singapore to sign the pact, praised the affluent financial hub of 5.7 million for its leadership in free trade.
“Now the United Kingdom is back as an independent trading nation, we are free to join this campaign,” she said.
“Singapore is already the UK’s largest trade and investment partner in ASEAN (the Association of Southeast Asian Nations), while the UK is Singapore’s top investment destination in Europe.”
Duties will be eliminated by November 2024, the same timeline as the agreement between the EU and Singapore, a former British colony that maintains close links with London.
Step closer to major deal
Truss said the agreement will take Britain a step closer to joining a massive free-trade zone, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Singapore is a member.
The pact groups 11 Pacific Rim nations, among them Australia, Canada, Chile, Japan, Mexico, and Vietnam. A previous version of the deal was once championed by the United States, but President Donald Trump abandoned it.
Singapore trade minister Chan Chun Sing said the city-state would support Britain’s application in early 2021.
Britain signed its first major post-Brexit trade deal with Japan in October, but Thursday’s agreement is its first with a member of ASEAN.
The 10-country bloc is home to 650 million people and – prior to the pandemic-induced downturn – had enjoyed rapid economic growth in recent years.
Truss is now set to head to Vietnam to sign a free-trade agreement, also aimed at replicating an existing EU pact.
Singapore-based international trade expert Deborah Elms told Agence France-Presse that deals which mirror the EU’s free-trade agreements with its partners are faster than others as “they replicate commitments and texts.”
She said the part of the Singapore deal that took most time was financial services as both London and the city-state are major hubs for the sector.
“Singapore has concerns about allowing too many financial service operators to be present in what is ultimately a small market,” she said.
Elms, executive director of the Asian Trade Centre, also said Britain’s potential accession to the CPTPP was a key development: “The UK clearly needs to shore up trade relationships in the wake of Brexit.”
Thursday’s signing came after Johnson and European Commission President Ursula von der Leyen gave themselves until Sunday, December 13, to decide on the future of post-Brexit negotiations, following a 3-hour dinner that left the two sides “far apart.” – Rappler.com