DOHA: As the GCC-Singapore Free Trade Agreement (GSFTA) entered into force from September 1, Singaporean and Qatari companies will now be able to play an increasing role in the Qatar’s development story without facing much hassle.
Besides FTA, Qatar and Singapore are negotiating to ink Investment Guarantee Agreements (IGAs) to further deepen and strengthen bilateral relations, according to a statement issued by the Singapore’s Ministry of State for Trade and Industry yesterday.
The FTA with Qatar is part of the Gulf Cooperation Council-Singapore Free Trade Agreement (GSFTA).
Qatar and Singapore get closer as total bilateral trade between two countries rose from $5.5bn in 2009 to $6bn in 2010, witnessing a growth of 12 percent. Qatar is ranked third among Singapore’s trading partners in GCC and 21st among Singapore’s trading partners worldwide.
With the FTA already into force, Qatari businessmen are also looking forward to invest in Singapore. “We hope that the new free trade agreement will provide conducive environment and more investment opportunities in Singapore for mutual benefits. There are plenty of areas, including telecommunications, electrical and electronic equipment, petrochemicals, jewellery, machinery and iron and steel-related industries in which Qatari and Singaporean businesses can establish and enhance cooperation to facilitate bilateral trade relations,” said Chairman of Al Balagh Trading and Contracting Company, Sherida Saad Jubran Al Kaabi.
Several big Singaporean companies are already working here on infrastructure development and other projects, including New Doha International Airport, Customs Authority, Erhama bin Jaber Al Jalahma Shipyard in Ras Laffan (N-KOM).
The agreement is expected to further enhance Singapore’s growing economic relations and trade with the Gulf Cooperation Council (GCC), consisting of six countries in the Middle East - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).
The GSFTA is a comprehensive free trade agreement covering trade in goods, trade in services, investments, rules of origin, customs procedures, government procurement, electronic commerce and economic cooperation.
Singapore is the first non-Middle East country to have a Free Trade Agreement (FTA) with the GCC. This FTA is Singapore’s second with the Middle East, after the Singapore-Jordan FTA in 2004.
For the first time, the GCC countries have committed to recognising the Singapore MUIS Halal Standards (SMHS) as similar and consistent to their domestic Halal Standards.
Highlighting the significance of the agreement, Lee Yi Shyan, Senior Minister of State for Trade and Industry said: “The GSFTA coming into force will bring the strong bilateral and economic ties between Singapore and the six GCC economies to a new level.”
The GCC is currently Singapore’s fifth largest trading partner and accounts for 35 percent of Singapore’s oil imports. Bilateral trade with the GCC reached a record high of S$68.6bn ($53.68bn) in 2012, an increase of 62 percent since 2007.
With the GSFTA, approximately 95 percent of all GCC tariff lines will qualify for tariff-free concessions. An additional 2.7 percent of tariff lines will qualify for the same tariff-free concessions by 2018. Based on Singapore’s latest bilateral trade figures in 2012, S$3.98bn ($3.11bn) worth of Singapore goods will qualify for immediate tariff-free treatment, while S$49.1m worth of Singapore goods will qualify after 2018.
Major sectors that will benefit from the elimination of tariffs are telecommunications, electrical and electronic equipment, petrochemicals, jewellery, machinery and iron and steel-related industries.
Singapore will grant zero-tariff treatment on all GCC imports with immediate effect.