What is Singapore Free Trade Agreement?
Singaporeans loooooove acronyms like SMRT (Smart Mass Rapid Transit), CTE (Central Expressway) and CPF (Central Provident Fund aka Give Me Back My Money Lah!). But since the EUSFTA became the talk of the town, I guess we have to add another to the ever growing list: FTAs, also known as Free Trade Agreements. When Singapore negotiates Free Trade Agreement successfully with other countries are incredibly important to businesses and economy so let’s just jump into it!
Time is money and to a businessman, we know how important this is. So we’re gonna keep things simple by telling you what’s important and what you need to know.
Singapore Free Trade Agreements, enacts two fundamentally important tasks. The first is to remove or reduce import duties. The second is to protect businesses and ensure the environment is conducive to work in.
Reducing or Removing Import Duties
Do you like oranges? I like oranges. And oranges from Europe is about to get cheaper because the EUSFTA was ratified (fancy name for making things official, like ROM lor). But how is my orange going to be cheaper because of a free trade agreement? Singapore trade very easy one, just follow my explanation.
Okay lets look at this diagram. I know its red and alarming but lets focus on what’s important. Remember, FTAs seek to reduce or remove duties in the Import Duty section of the diagram.
So maybe going to an NTUC (Singapore’s Tesco/Walmart) to buy 5 oranges from Spain costs $3.50 before the EUSFTA was ratified. Now, because the EUSFTA is confirmed plus chop, my oranges is going to cost, maybe $3? Like that, I can buy five oranges and get one free for the original price leh!
Bright, juicy and cheap!
And the FTA also says that since company exports can increase, my incoming oranges will have a huge supply and it may even reduce the cost even more! Jialat, like that I sure buy too many oranges.
Lastly, if the gahmen (government) in Spain is not happy that Singapore suddenly wants so many oranges because Chinese New Year, they cannot anyhow sukah sukah (without jurisdiction) change their laws so that the oranges cannot be exported. This protection ensures that businesses are protected from political changes!
Regulation and Fairness
Contracts are legal binding documents, and they’re especially useful in FTAs to protect businesses.
Shiok right, things you buy may be cheaper. But if you’re scared of investing in an overseas market, don’t scared. When gahmen negotiate they also care about your business. Singapore free trade agreement states and ensures that your business has equal access to other companies with FTA also.
So if you enter Spain and want to help them (and help me) grow more oranges, Spain must treat you and other companies fairly instead of choosing one someone else because they’re bias.
Then hor, touch wood la, Spain government kena overthrow and your orange business is affected, you can claim compensation!
Also, lets say your company does successfully negotiate a contract in Spain and you want to hire Singaporeans to help you over there, there is a reduction or removal of the quota of Singaporeans that can be hired. Nice lo!
Anyway hor, if you want to know more about working overseas just chat with us here lah. Don’t shy, we very friendly one!
Written by: Rhyn Chan
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