Taiwan signed a free-trade deal with Singapore on Thursday, its first with a Southeast Asian country.
This is the second economic cooperation agreement that Taiwan has signed with a key regional economic player other than China in recent months, after the inking of a trade pact with New Zealand on July 10. As Singapore is a founding member of the Trans-Pacific Partnership (TPP) and a member of the Regional Comprehensive Economic Partnership (RCEP), this achievement helps pave the way for Taiwan to join the TPP and RCEP.
“The agreement will further boost trade liberalization and internationalization for Taiwan and create beneficial conditions for our entry to the TPP and the RCEP,” Foreign Minister David Lin told a press conference in Taipei.
Taiwan and Singapore began negotiating the comprehensive agreement in May 2011. It consists of 17 chapters covering trade in goods, rules of origin, customs procedures, sanitary and phytosanitary measures, technical barriers to trade, ecommerce, trade in services, investment, competition policy, government procurement, intellectual property and resolution of disputes, among others.
Taiwan and Singapore enjoy close economic relations, with bilateral trade reaching $28.2 billion in 2012. Singapore is Taiwan’s fourth-largest export market, eighth-largest source of imports, and ninth largest source of foreign direct investment. Taiwan is Singapore’s eighth largest trading partner, 10th largest export market and fifth largest source of imports.
Both sides are members of the World Trade Organization (WTO) and so have the right to conclude trade agreements under the WTO framework. Signed in accordance with WTO standards, the bilateral agreement is formally named the agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (Astep).
Signing this economic partnership agreement with Singapore marks another step in Taiwan’s government’s strategy to achieve its comprehensive participation in regional economic integration. It underscores Taiwan’s commitment to trade and investment liberalization, and will serve as an example during Taiwan’s negotiations with other countries over similar economic cooperation agreements.