Singapore and Taiwan seal free trade deal

PHOTO: Singapore and Taiwan seal free trade deal

Taiwan signed a free-trade agreement with Singapore yesterday that will scrap taxes on Taiwanese exports and give a fillip to trade worth some US$28 billion (S$35 billion) last year, as the island looks to reduce its growing dependence on trade with China.

Taiwan has been chasing trade deals since a landmark 2010 pact with China that cemented an economic rapprochement between the two political rivals, but Chinese pressure over Taiwan's status has kept progress on trade deals slow.

Chinese Foreign Ministry spokesman Hong Lei said it noted the news, adding that the government had no problem with such economic exchanges.

However, he said China hoped that Singapore "deals cautiously and appropriately in its trade and economic relations with Taiwan".

Singapore is Taiwan's fifth-largest trade partner and fourth-biggest export market. Under the pact, Singapore will eliminate duties on all imports from Taiwan, while Taiwanese taxes on some 83 per cent of goods imported from Singapore will be scrapped.

Farm and industrial goods are expected to be the main beneficiaries of the agreement, which also covers areas including investment protection, e-commerce and government procurement.

The Taiwanese government said the pact would increase Taiwan's gross domestic product by US$700 million and create 6,154 new jobs.