Singapore Business Federation’s Free Trade Agreement (FTA) Survey 2023 found that more businesses are familiar with and have benefitted from FTAs compared to 2021. The ASEAN Trade In Goods Agreement (ATIGA) and ASEAN – China Free Trade Agreement (ACFTA) were the most cited FTAs that benefitted businesses. However, businesses continue to face issues with non-tariff barriers and understanding how to make the best use of FTAs.
Conducted between 9 October and 17 December 2023, the survey covers more than 800 businesses, across diverse industry sectors in Singapore. The findings were supplemented with closed-door focus group discussions to enable a deeper understanding of challenges faced in cross-border trade and investment.
Survey Unveils Significant Gains and Ongoing Hurdles for Singapore Businesses Using FTAs
The key findings are:
- An increasing number of Singapore businesses were familiar with FTAs (85% in 2023 vs 62% in 2021).
- More businesses reported that they have benefitted from improved market access through FTAs (73% in 2023 vs 50% in 2021).
- Key FTAs that have reaped benefits: The ASEAN Trade In Goods Agreement (ATIGA) (81%) and ASEAN – China Free Trade Agreement (ACFTA) (41%) were consistently cited as key agreements that businesses have benefitted from over the past three years.
Amongst the new regional FTAs that have entered into force, the Regional Comprehensive Economic Partnership (RCEP) (43%) and the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP) (38%) were cited by Singapore businesses as the most-used regional FTAs.
Businesses which indicated that they did not benefit from FTAs most often cited the two following reasons:
- FTA was not applicable to their business (43%)
- Insufficient knowledge of FTAs (25%)
About 2 in 5 businesses who faced issues in obtaining tariff concessions were unable to meet the rules of origin to qualify for tariff preferences. A similar proportion said they experienced discrepancies in how export and import authorities classified goods.
Businesses that trade goods, supply services and invest overseas faced a range of difficulties despite the presence of FTAs:
- For businesses trading goods overseas – the top 3 issues faced are (i) Obtaining information on standards/certifications, labelling and market conditions (39%); (ii) Requiring more time to comply with new regulations by importing authorities (35%); (iii) Meeting technical regulations (33%).
- For businesses supplying services overseas – Issues faced included
(i) Accessing markets with local monopolies or exclusive service suppliers or restrictions on the number of foreign service suppliers (46%);
(ii) Receiving decisions on applications or authorisations in a timely fashion (34%). - For businesses investing overseas – Issues faced included
(i) Accessing regulatory information (53%);
(ii) Understanding the tax and social systems (53%);
(iii) Overcoming formal restrictions on foreign equity participation in particular sectors (47%).
