Singapore and South American customs union work on free trade agreement

Singapore and MERCOSUR countries' trade in goods reached $3.97b in 2017.

Singapore and South American customs union MERCOSUR launched negotiations for a free trade agreement, an announcement revealed.

The MERCOSUR SIngapore Free Trade Agreement (MSFTA) will target to improve trade between Singapore and South American countries Argentina, Brazil, Paraguay, and Uruguay which have a collective market GDP of US$2.5t.

“It will also facilitate investments from companies in MERCOSUR who are interested to expand their presence in Southeast Asia by using Singapore as a regional hub,” senior minister of state for trade and industry and education Chee Hong Tat said.

In 2016, 94 firms from MERCOSUR countries were in Singapore. Both Enterprise Singapore and the Economic Development Board (EDB) have offices in São Paulo, Brazil.

Singapore’s business interests in MERCOSUR are in the oil and gas, agri-business, manufacturing, hospitality and logistics sectors. Some Singapore-growned market players that have interests in MERCOSUR countries include Ascott, Changi Airports International, SMRT Corporation, Olam International, Wilmar International and Sunningdale Tech.

Singapore and MERCOSUR countries’ trade in goods reached $3.97b in 2017, whilst trade in services amounted to $2.69 billion in 2016. Meanwhile, Singapore’s stock of Direct Investment Abroad (DIA) in the MERCOSUR countries was at $1.91b in 2016.