FTA with Pacific Alliance opens doors to new opportunities for S'pore businesses: Alvin Tan
FTA with Pacific Alliance opens doors to new opportunities for S'pore businesses: Alvin Tan
SINGAPORE – The free trade agreement between Singapore and the Pacific Alliance will serve as a platform for Singapore's businesses to access new markets and new opportunities in Latin America, said Minister of State for Trade and Industry Alvin Tan on May 7.
Speaking at a dinner at The Fullerton Hotel to commemorate the recent entry into force of the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) for Singapore, Chile and Peru, Mr Tan said the pact 'fosters an environment of predictability and fairness, which is crucial for our investors and businesses to make decisions, operate with confidence and thrive'.
The FTA will give Singapore companies greater access to the Pacific Alliance countries – Chile, Colombia, Mexico and Peru – that are collectively deemed the world's ninth-largest economy, with a total population of 235 million.
The four countries of the Pacific Alliance have a combined gross domestic product (GDP) of more than US$2.7 trillion (S$3.5 trillion) in nominal terms, accounting for about 40 per cent of the total GDP of the Latin America and Caribbean region, according to the World Bank.
The PASFTA was signed on Jan 26, 2022.
Singapore ratified the agreement in July that year, and Peru in February 2023. Chile ratified the pact in March 2025, bringing the PASFTA into force for the three countries on May 3.
Mr Tan said that beyond the PASFTA, Singapore and its partners in Latin America are engaging in the avoidance of double taxation agreements, as well as frameworks to facilitate digital trade and green economy collaboration.
'These are ongoing efforts to further expand the network of trade-enabling agreements between Singapore and Latin America,' he said.
The PASFTA will scrap most tariffs on goods traded between partner countries, and improve the transparency and efficiency of Customs procedural processing.
Singapore service suppliers and investors will be treated as favourably as those from the Pacific Alliance. Also, Singapore firms will not be required to appoint individuals of any particular nationality to senior management.
Singapore is already an FTA partner with Chile and Mexico through the existing Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and with Peru through the CPTPP and the bilateral Peru-Singapore FTA.
The Ministry of Trade and Industry said Singapore's bilateral trade with the Pacific Alliance in 2024 was $12.5 billion. Some top traded products include electric machinery, refined metal products, cocoa products, wine and seafood.
About 100 Singapore companies are already operating across the Pacific Alliance markets, mostly in sectors such as technology and the digital economy, food trade, infrastructure, and port management and logistics.
Experts believe increased access to relatively new markets will be critical for Singapore companies at a time when the world's largest economy – the US – has turned hostile towards the global trading order it helped establish after World War II.
Amid the turmoil, Singapore has vowed to continue strengthening multilateralism and free trade, and seek new opportunities in less-explored markets for its businesses.
Mr Tan said Singapore and its trade partners are 'sailing through stormy conditions and choppy waters', and that geopolitical tensions are rising, trade barriers are going up, supply chains are fracturing, and businesses are navigating a volatile and uncertain world.
'In today's environment, the PASFTA takes on added significance as a reminder to all of us of the importance of international engagement and cooperation, and of upholding rules-based trade,' he said.
Mr Francisco Tenya Hasegawa, Peru's Ambassador to Singapore, said his country looks forward to not only deepening commercial ties but also cooperation in environmental and strategic spheres with the Republic.
He said Peru offers traders and investors world-class infrastructure, such as the Chancay Megaport, ready to receive and dispatch large vessels en route to Asia.
Peru also has vast resources in different areas such as agriculture, poultry, fishery foods and superfoods, as well as rare minerals, and precious and semi-precious metals.
'The table is set. Let us seize this moment to expand markets, share innovation and grow together,' the ambassador said.
Chile's Ambassador Tamara Villanueva said her country already has a strong presence in Asean markets, with more than 275 products from fresh fruits to seafood, and with the possibility of expanding this list to over 3,000 products in the future.
She said Chile is positioning itself as a key enabler of the global energy transition by advancing sustainable mining practices and using its rich reserves of essential minerals, not just copper and lithium, but also molybdenum and rare earths needed for green technologies.
The PASFTA – Singapore's 28th FTA – is a comprehensive agreement containing 25 chapters, including trade in goods, services and investment, small and medium-sized enterprises, good regulatory practices for trade and investment, and electronic commerce.
It is also Singapore's first FTA with a chapter on international maritime transport services. This chapter aims to enhance physical connectivity between partner countries and facilitate the exchange of best practices and training opportunities.
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