At the 26th ASEAN Economic Community Council Meeting, the Association of Southeast Asian Nations (“ASEAN“) Member States (“AMS“) signed two landmark upgraded agreements:
- the ASEAN Trade in Goods Agreement (“ATIGA“) Upgrade; and
- the ASEAN-China Free Trade Area (“ACFTA“) 3.0 Upgrade.
These remain Singapore’s most frequently used free trade agreements (“FTAs“). The upgrades are designed to streamline customs and trade processes to boost cross-border commerce, and introduce commitments in new areas like supply chain connectivity, digital economy and green economy.
Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong, who signed the upgraded agreements on behalf of Singapore, highlighted that “[T]he signing of the ATIGA Upgrade and ACFTA 3.0 Upgrade signals ASEAN’s commitment to deepen regional linkages and reinforce its role as a central node in the global economy. These next generation agreements will open new pathways for ASEAN and Singapore businesses to seize opportunities in trade, digitalisation, and sustainability.“
ATIGA Upgrade
The ATIGA is the primary agreement used by Singapore’s businesses to trade within the ASEAN region, and provides a comprehensive framework aimed at lowering trade barriers among the AMS. The ATIGA Upgrade modernises the original ATIGA, broadening its scope and strengthening commitments in both traditional goods trade and emerging sectors including the green and digital economies. Though the ATIGA Upgrade, businesses will benefit from:
- Market access and trade facilitation
- Enhanced market access through simplified and more flexible rules of origin, particularly in key industries such as electronics, chemicals, and textiles.
- Streamlined customs procedures to support businesses.
Improved tariff liberalisation within the region, such as in agricultural products, cotton, and vehicles.
- Transparency
- Enhanced transparency in health, safety, and product regulations for food, animals, plants, and related products, enabling companies to reduce both time and expenses. This advancement also features faster response times for urgent technical discussions and the prompt publication of new or updated regulations.
More timely resolutions of trade disputes through new and cost-efficient alternative modes of dispute settlement.
- Supply chain connectivity
- Enhanced safeguards to ensure the uninterrupted movement of essential goods within the region, particularly food and agricultural products during humanitarian emergencies.
Opportunity to set up a crisis response platform and to facilitate collaboration during crises.
- Sustainability
- Closer collaboration to reduce trade barriers on environmental goods, including encouraging the adoption of digital technologies and standards, and promoting the use of cleaner or renewable energy sources in production. This is a new addition to ASEAN agreements, and builds upon ASEAN’s existing green economy and commitments.
Facilitated flows of remanufactured goods, including environmentally-friendly goods and recycled products. This feature is also new to ASEAN’s FTAs. It will first be implemented among ready AMS, i.e. Brunei Darussalam, Malaysia and Singapore. The other AMS will commence discussions on the implementation of these provisions within five years (for Indonesia, the Philippines, Thailand) or seven years (for Cambodia, Lao PDR, Myanmar and Viet Nam) after the ATIGA Upgrade enters into force. They will conclude discussions two years after the ATIGA Upgrade’s commencement.
- Inclusive growth
- A new chapter on Micro, Small, and Medium Enterprises (“MSMEs“) to enable MSMEs to seize opportunities in new and emerging areas, and to foster collaboration between governments to upgrade MSMEs’ capabilities.
ACFTA 3.0 Upgrade
The ACFTA entered into force in 2010, with the goal of lowering trade barriers between China and the AMS. The ACFTA 3.0 Upgrade enhances the original agreement by introducing stronger commitments designed to offer greater predictability and foster a seamless trading environment for businesses. It also introduces new commitments in three key emerging areas, namely digital economy, green economy and supply chain connectivity. The ACFTA 3.0 Upgrade will benefit Singapore businesses through:
- Transparency and custom procedures
- Greater transparency in health, safety and product regulations for food, animals, plants and other products to help businesses save time and costs.
- Enhanced customs processes to, among others, ensure the expedited release of goods and express shipments.
- Supply chain connectivity, digital economy and sustainability
- Three new chapters on these three key emerging areas, allowing businesses to have greater certainty when trading and tap new growth opportunities.
- Inclusive growth and greater protection for consumers
- New MSME chapter to support MSMEs in tapping into opportunities in emerging areas such as sustainability. This chapter also aims to encourage greater cooperation between governments, thereby strengthening the capabilities of MSMEs and preparing them for future growth.
- New Competition and Consumer protection chapter to safeguard consumers against unfair or anti-competitive business practices. This chapter features the most advanced Consumer Protection rules across all of ASEAN’s and Singapore’s FTAs thus far. It also addresses contemporary concerns, including the protection of online consumers and foreign consumers overseas.
Should you have any queries on the above matters, please feel free to contact our team set out on this page.
Click on the following links for more information:
Available on the Ministry of Trade and Industry (“MTI“) website (www.mti.gov.sg):
- MTI Press Release titled “ASEAN powers ahead with next-generation trade agreements and global engagement at the 47th ASEAN Summit”
- ATIGA infographic
- ACFTA infographic
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