According to the Ministry of Trade and Industry (MITI) on Friday (31 Jan), during the 11-month transition period of Brexit commencing on Saturday, a free trade agreement between the European Union and Singapore will continue to apply to Britain.
In the meantime, the UK and Singapore, in view of the ending transition period and the cessation of EU-Singapore Free Trade Agreement (FTA) for Britain, are both working on an agreement to maintain trade between them.
It is only on 31 Jan that Britain formally leaves the EU but there is a transition period between 1 Feb and 31 Dec of this year. During this period, the UK remains functionally as an EU member state and be party to the EU’s international agreements including the EU-Singapore FTA which was enforced in November last year.
Chan Chun Sing, the MITI minister remarked that “The UK and Singapore share robust and longstanding economic ties. For Singapore companies doing business with the UK, the transition period will provide certainty for continued trade between Singapore and the UK. We will continue our close cooperation with the UK to broaden and deepen our bilateral economic relations for the future.”
The Singapore Business Federation (SBF) was glad that even during the transition period, the EU-Singapore FTA is still ongoing.
The transition period will grant some time to businesses to prepare for an independent UK regulatory environment as well as giving Singapore businesses and UK investments a degree of certainty as Brexit follows suit, SBF chief executive Ho Meng Kit stated.
However, the subsequent impact on the UK’s domestic regulations upon investment, commerce and trade is still unclear alongside the nature of UK’s post-Brexit relationship with the EU.
“This uncertainty translates into risks over supply chain and investment decisions. Greater clarity on UK’s independent regulatory regime will help our companies to execute their market strategies in the country. That said, we believe that Brexit’s impact on Singapore companies,” Mr Ho added.
Singapore firms have presence in retail, real estate, hospitality and investment over in the UK and these firms have been operating “cautiously and develop their businesses along their own trajectories, evident in the recent acquisitions of student accommodation assets were made by Singapore Press Holdings, Far East Orchard and Mapletree Investments.”
“Moving forward, we look forward to the UK and Singapore governments working together to ensure that the benefits of the agreement will be enjoyed by businesses in both countries thereafter. We also urge both governments to ensure the protection of investment rights and assist any businesses impacted by developments,” Mr Ho concluded.