Singapore Joins the Pacific Alliance, Forming the PASFTABy Sofía Hanna | Mon, 08/02/2021 - 10:50
The Pacific Alliance (Chile, Colombia, Mexico and Peru) and Singapore have finished negotiations for the creation of the Pacific Alliance-Singapore Free Trade Agreement (PASFTA). The new agreement will allow both Singapore and the Pacific Alliance to fulfill their joint purpose and enhance business relationships, attract investments, expand market access for goods and boost access for service providers in a wide range of sectors.
“Singapore continues to show its commitment with open markets and free trade, the PASFTA agreement ratifies Singapore’s interest in the Latin American region and looks to complement our network and trade tools for Singapore to better engage Chile, Colombia, Mexico and Peru. We were one of the first observers of the alliance and now we are happy to become the first Associate Member” said Francisco Rios, Regional Group Director of Enterprise Singapore for Latin America to MBN.
The PASFTA negotiations, concluded on July 21st, were held via video conference by the Ministers of Trade of Colombia, Maria Ximena Lombana; Peru, Claudia Cornejo; and Mexico, Tatiana Clouthier. Representing Chile was Minister of Foreign Relations Andres Allamand and representing Singapore was Minister for Trade and Industry Gan Kim Yong, as reported by the official PA release.
During the conference, Mexico highlighted the importance of establishing these alliances and developing best practices and synergies in cooperation, technology and production chains. Kim Yong said that “Singapore is honored to be joining the Pacific Alliance in announcing the conclusion of the Pacific Alliance-Singapore Free Trade Agreement. The PASFTA establishes a modern, comprehensive, high-quality and mutually beneficial economic partnership that builds on existing agreements between the Pacific Alliance and Singapore. This agreement complements Singapore’s existing bilateral and plurilateral links with each Pacific Alliance country, including the Trans-Pacific Strategic Economic Partnership Agreement, Peru-Singapore FTA, and, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It is significant that the PASFTA will be our first FTA with Colombia.”
The benefits that this treaty will bring to all the countries involved range from a platform for collaboration in various areas such as energy, food trade, digital economy, infrastructure and urban solutions, port management and logistics and the linkage of National Single Windows. “PASFTA helps us facilitate the entrance of Singapore companies to a combined market of more than 200 million people with GDP of more than US$4 trillion (PPP, 2020, International Monetary Fund) but likewise it further opens the door for Latin-American companies to collaborate better with Singapore based companies and take advantage of the growth, dynamics and innovations arising in South East Asia,” said Rios. “We see great opportunities to enhance our bilateral trade, our attraction of investment and to jointly explore new technologies and innovation with Mexico as part of the implementation of the PASFTA.”
The Pacific Alliance
The Pacific Alliance is positioned as the eighth largest economy, attracting 56 million tourists, representing 41 percent of the GDP of Latin America and the Caribbean, adding up to 38 percent of its foreign direct investment. Combined, the region has a population of 230 million, a GDP per capita of US$19,000, and exports reaching US$627 billion, making the Alliance the eighth largest exporter in the world. In 2019, Singapore’s total goods trade with the Pacific Alliance was $6.1 billion, representing 33.2 percent of total goods trade with Latin America. Singapore entered the alliance in 2014, starting as an Observer State and will now be becoming the first Associated State of the Pacific Alliance.