ASEAN Briefing , 28 Feb 2021
By Bob Savic, Advisor to Dezan Shira & Associates
From “Singapore-on-Thames” to cruising on the Singapore River
There was much controversy, before and after the United Kingdom’s (UK) Brexit from the European Union (EU), in talk of it adopting a free trade and manufacturing model similar to Singapore’s. The idea was dubbed as “Singapore-on-Thames” by the British media. Since the UK and EU trade and economic agreement (TEA) in December 2020, speculation over the UK becoming a supposedly regulation-light jurisdiction accessing the EU’s Single Market, was effectively quashed by the TEA’s restrictive conditions on aligning competition policy, commonly referred to as the “level-playing field”.
In contrast to Britain’s increasingly complex trading relations with the rest of Europe, Singapore’s role as a hub for UK companies, whether as exporters or investors accessing Southeast Asia’s and broader Asian dynamic economies, was elevated by the new UK-Singapore trade agreement (UKSTA) which came into effect on 1st January 2021. It is anticipated the UKSTA should provide more certainty and clarity in supporting the longstanding positive long-term growth trend in UK goods and services exports to Singapore.
These have steadily risen from £7.2 billion (US$10 billion) in 2010 to £10.3 billion (US$14.3 billion) in 2019, only interrupted by a sharp fall of -14.5 percent in 2020, due to the Covid-19 pandemic. The number of UK VAT-registered businesses exporting to Singapore also continues to grow; reaching 10,300 in 2019. The UK regions with the highest concentrations of goods exports, to Singapore, were the East Midlands accounting for £1.5 billion (US$2 billion) or 29 percent of the total, Scotland with £0.6 billion (US$835 million) or 11.5 percent, and the Southwest with £0.6 billion (US$835 million) making up 11.1 percent. London came in fifth place having exported £0.5 billion or 10.4 percent of the total. Given the large number of UK companies exporting to Singapore across a diverse range of British regions, the UKSTA should become an additional platform by which to enhance the UK’s exports into Singapore.
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