30 October 2019
On 15 October 2019, at the 15th Joint Council for Bilateral Cooperation (“JCBC”) meeting held in Chongqing, China, Singapore Deputy Prime Minister Heng Swee Keat and People’s Republic of China Vice Premier Han Zheng announced the entry into force of the China-Singapore Free Trade Agreement (“CSFTA”) Upgrade Protocol.
The CSFTA entered into force on 1 January 2009 and was China’s first comprehensive bilateral free trade agreement with an Asian country. China is Singapore’s largest trading partner while Singapore has been China’s largest foreign investor since 2013. The upgraded CSFTA will also grant Singapore companies greater access into China’s legal, maritime and construction services sector.
The upgraded CSFTA took effect from 16 October 2019 except for the articles relating to Rules of Origin (“ROO”), which will take effect on 1 January 2020.
Key highlights of CSFTA
Some of the key highlights of the upgraded CSFTA are briefly discussed below:
- ROO: The upgraded CSFTA enhances market access for goods through improvements in the ROO. These ROO improvements allow more petrochemical exports from Singapore to qualify for preferential treatment when imported into China. Petrochemical products are among Singapore’s top exports into China, accounting for approximately 28% of Singapore’s total exports to China in 2018. The articles related to ROO in the CSFTA will take effect from 1 January 2020.
- EODES: Singapore and China have also agreed to establish the Electronic Origin Data Exchange System (“EODES”). With the implementation of EODES, traders will no longer need to submit a Certificate of Origin as issued by Singapore Customs in hardcopy to China and both sides can transmit the relevant documents directly through EODES. This system will be implemented from 1 November 2019.
New financial initiatives
Also on 15 October 2019, the Monetary Authority of Singapore (“MAS”) announced that new initiatives were underway to strengthen capital market activities between Singapore and China. These measures will facilitate the growing interest of financial institutions based in Singapore and China to expand in each other’s markets. For instance, MAS and the People’s Bank of China have agreed to establish a cooperation mechanism to enable designated Singapore and Chinese banks to offer custody and trading services for regional and global investors in China’s bond market. The initiatives were discussed at the JCBC by representatives from Singapore and China.