What are Free Trade Agreements (FTAs)?

FTAs are legally binding international treaties between two or more trading partners that seek to promote trade by reducing barriers to trade in goods, services and investments.

Who stands to benefit from FTAs?

With Singapore being an open trading economy, a vast majority of imports already enter Singapore tariff-free. FTAs serve to benefit Singapore exporters most, in particular those in the following categories:

  • Singapore-based exporters/manufacturers whose products currently face tariff restrictions and qualify to receive preferential tariff treatment under FTAs beyond a trading partner’s World Trade Organisation (WTO) commitments.
  • Singapore-based exporters/manufacturers whose products are traded between FTA partner countries stand to benefit from less stringent rules of origin.
  • Singapore-based service suppliers and investors for whom trading partners commit to safeguard market access, protect investments and ensure business certainty under FTAs.

Businesses face unique situations according to their industry dynamics. As such, FTAs may benefit some businesses more than others.

You may not need to leverage on FTAs if:

0 import tariffs
Your product is already enjoying 0% import tariffs in your export market(s), i.e. Most Favoured Nation (“MFN”) rate is already zero.
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WTO
There are existing WTO agreements which eliminate tariffs without the need to use FTAs (e.g. the WTO Information Technology Agreement (“ITA”), which eliminates tariffs on IT products).
Free Trade Zone
Your product is exported to a Free Trade Zone (“FTZ”).

Free Trade Agreements (FTAs) consist of three main areas:
Trade in Goods
Trade in goods
seeks to remove tariffs and address non-tariff measures
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Trade in services
Trade in services
deals with regulations to ensure market access and national treatment
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Investment
Investment
seeks to protect and promote investment
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In keeping pace with an ever-changing global landscape, the scope of our FTAs is expanding to include more issues of interest to businesses, such as e-commerce, intellectual property rights, competition, government procurement and dispute settlement.