The United Kingdom-Singapore Free Trade Agreement (UKSFTA) will take effect from Friday, Jan. 1, the Ministry of Trade and Industry (MTI) said in a press release issued on Thursday.

First trade agreement between the UK and an Asean country

The European Union-Singapore Free Trade Agreement (EUSFTA) will then cease to apply to UK-Singapore trade, MTI added.

The agreement, which was signed on Dec. 10, 2020, is the first of its kind between the UK and an Asean member state.

Following the signing of the UKSFTA by Minister for Trade and Industry Chan Chun Sing and UK Secretary of State for International Trade Elizabeth Truss, the UK and Singapore have completed the respective domestic procedures for the agreement’s provisional application.

The agreement will take effect at 7:00am on Jan. 1 via provisional application, which will continue until the UKSFTA is ratified by both countries and enters into force.

MTI said the UKSFTA provides certainty and clarity in trading arrangements between both countries.

Under the new agreement, companies will be able to enjoy the same EUSFTA benefits when trading between the UK and Singapore.

These include the elimination of tariffs on Singapore goods (such as food products, petrochemicals, electronics and more) that enter the UK, increased access to each country's respective services and government procurement markets, as well as reduction of non-tariff barriers in certain key sectors.

MTI further said the UKSFTA will remove unnecessary technical barriers to trade for both Singapore and UK exporters.

The move will reduce costs for exporters, create a level playing field for UK and Singapore companies, and facilitate trade between both countries.

Here's what the UKSFTA will do for both UK and Singapore:

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Top image via UK Department for International Trade