Singapore first non-Middle East country with GCC FTA
The GSFTA is a comprehensive free trade agreement covering trade in goods, trade in services, investments, rules of origin, customs procedures, government procurement, electronic commerce and economic cooperation. Singapore is the first non-Middle East country to have a Free Trade Agreement (FTA) with the GCC. This FTA is Singapore's second with the Middle East, after the Singapore-Jordan FTA in 2004.
For the first time, the GCC countries have committed to recognize the Singapore MUIS Halal Standards (SMHS) as similar and consistent to their domestic Halal Standards. Four out of the six GCC countries have already committed to recognize SMHS and another two countries will start negotiations shortly to do the same. This will open up more opportunities in Singapore's export of Halal products to the GCC states.
The GCC is currently Singapore's fifth largest trading partner and accounts for 35 percent of Singapore's oil imports. Bilateral trade with the GCC reached a record high of S$68.6 billion in 2012, an increase of 62% since 2007.
Since 2004, Singapore companies have secured over S$20.8 billion of projects in the GCC states, some of which are mega projects worth more than S$1 billion each. Over the years, there has also been an increase in the number of bilateral forums between Singapore and GCC to facilitate regular visits and exchanges.
With the GSFTA entry into force on 1 September 2013, approximately 95 percent of all GCC tariff lines will qualify for tariff-free concessions. An additional 2.7 percent of tariff lines will qualify for the same tariff-free concessions by 2018.
Based on Singapore's latest bilateral trade figures in 2012, S$3.98 billion worth of Singapore goods will qualify for immediate tariff-free treatment, while S$49.1 million worth of Singapore goods will qualify after 2018.
Major sectors that will benefit from the elimination of tariffs are telecommunications, electrical and electronic equipment, petrochemicals, jewelry, machinery and iron and steel-related industries. Singapore will grant zero tariff treatment on all GCC imports with immediate effect. ■