SINGAPORE–JAPAN FTA

Singapore and Japan have entered into an FTA as part of the Japan– Singapore Economic Partnership Agreement (JSEPA). The idea of a JSEPA was first mooted in December 1999 by the Singapore Prime Minister, Goh Chok Tong, to his Japanese counterpart. A Joint Study Group was established to study the viability of the proposal. The group completed its work in September 2000 and the governments of Japan and Singapore entered into formal negotiations on a trade pact in October of that year. Following a series of negotiating rounds, the agreement was signed on 13 January 2002 in Singapore and came in force on 30 November 2002.

The economic linkages between Japan and Singapore are deep and well established. The recently concluded “New Age Economic Partnership” is aimed at fortifying and revitalizing these already strong linkages bilaterally as well as promoting joint Japan– Singapore trade and investments in third countries.

Highlights of the JSEPA Agreement

Trade in Goods and Rules of Origin

The JSEPA eliminates tariffs on goods covering 98.5 per cent of current trade between the two countries, much higher than the WTO zero-tariff commitments, which currently covers about 65 per cent of current Japan–Singapore trade. Singapore has committed to grant zero-tariff treatment on all imports from Japan. In turn, Japan has more than doubled its zero-tariff commitments to Singapore from the current 34 per cent to 77 per cent of total tariff lines. While preferential tariff-free market access has been granted to an extensive range of products, agriculture is the one area where tariff concessions have lagged because of the extreme political sensitivity of this sector in Japan, on the one hand, and its relative unimportance to Singapore, on the other. Both countries are prohibited from maintaining any export duties that may distort bilateral trade. Appropriate rules of origin have been designed in this respect.

Trade Facilitation

As tariff barriers have progressively come down worldwide, focus of trade agreements has shifted to other potential barriers to the flow of goods that may restrict market access opportunities.