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February 09, 2022

Singapore and Pacific Alliance Sign Free Trade Agreement

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Key Takeaways

  • the Pacific Alliance and Singapore signed the Free Trade Agreement (Agreement) at the 16th Summit of the Pacific Alliance. With the signature of the Agreement, Singapore became a member state of this international organization, whose members are Colombia, Chile, Mexico and Peru.
  • The Agreement contains 25 chapters that regulate important areas, such as e-commerce, public procurement, telecommunications, maritime services, cooperation, good regulatory practices, SMEs and the temporary entry of people travelling for business. Essential issues regarding the exchange of goods between the parties are also regulated, including market access, customs procedures and trade facilitation, technical barriers to trade and sanitary measures.

On January 26, 2022, the Pacific Alliance and Singapore signed the Free Trade Agreement (Agreement) at the 16th Summit of the Pacific Alliance. With the signature of the Agreement, Singapore became a member state of this international organization, whose members are Colombia, Chile, Mexico and Peru.

The Agreement contains 25 chapters that regulate important areas, such as e-commerce, public procurement, telecommunications, maritime services, cooperation, good regulatory practices, SMEs and the temporary entry of people travelling for business. Essential issues regarding the exchange of goods between the parties are also regulated, including market access, customs procedures and trade facilitation, technical barriers to trade and sanitary measures.

Singapore will be a strategic ally of the Pacific Alliance countries thanks to its geographic location, logistical capacity and its recognized status as a hub for innovation, finance and technology.

Singapore is one of the 10 countries with the highest GDP per capita in the world, with US $66,263 according to the International Monetary Fund. Singapore's statistics department recorded a GDP growth of 7.2 percent during 2021, with US $454 billion in exports and US $404 billion in imports.

The Pacific Alliance is the eighth-largest exporter in the world, with a combined population of 230 million, a combined GDP of more than US $2.6 trillion, and annual exports totaling US $627 billion.

All member states must now complete their internal ratification procedures to formalize the Agreement and have it take effect. Following the signing of the Agreement with Singapore, the Pacific Alliance negotiations with other countries such as Australia, New Zealand and Canada are expected to make significant progress.

At the summit, Mexico assumed the pro-tempore presidency of the Pacific Alliance for the year 2022. Mexico will be promoting the recognition of the region as an international benchmark and coordinating all the efforts of the Pacific Alliance during this important year.

Latin American and Singapore businesses should take note of this development and, take advantage of the significant trade opportunities and economic growth that this trade agreement will generate.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

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