Advantages And Disadvantages Of Singapore's Free Trade Agreement
Singapore’s Free Trade Agreement
Essay No.10
Group No.13
Introduction
A Free Trade Agreement (FTA) is a legally binding agreement between two or more countries to reduce or eliminate barriers to trade. Features of a free trade agreement include trade of goods and services without tariffs or quotas, the absence of policies such as subsidies and regulations that give firms an advantage over others, and unregulated access to markets. In 1993, Singapore signed its first FTA under the ASEAN Free Trade Area (AFTA) [1]. In addition, it has bilateral agreements with China, USA, and Japan to name a few. The country is also a member of the Trans-Pacific SEP Agreement (Brunei, New Zealand, Chile) and the Singapore-European Free Trade Association (Switzerland,
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Bilateral Free Trade Agreement
Trade agreements between two nations are considered bilateral trade agreements. It gives them favoured trading status with each other. Expanded accesses to each other’s markets are allowed, and it results in the growth of both countries’ economies [5].
The Singapore - Costa Rica Free Trade Agreement was signed in Singapore on April 6,2010 and is the third bilateral FTA between Singapore and a South American country. The agreement is broad and comprehensive, covering issues such trade in goods and services, investment, bilateral cooperation and competition policy. Once the trade agreement was in force, Costa Rica agreed to eliminate custom duties for 90.6% of its tariff lines, while tariffs on the remaining products would be eliminated over a period of 10 years [6]. Key Singapore exports that will benefit from the FTA are electronics, machineries, petrochemicals and processed food. As discussed in the trade agreement, Singapore granted immediate duty free access for all imports from Costa Rica upon entry into force of the
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Since signing its first trade agreement in 1993, Singapore’s economy has experienced rapid development. The country has improved its infrastructure and workforce to become more efficient at production and resource allocation. Over the years, the composition of Singapore’s exports has evolved from labour-intensive to high value-added products, such as electronics, chemicals and biomedical products. Coupled with increased international cooperation and government subsidized business incentives, Singapore has effectively reaped the benefits of
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