On December 7, Mercosur signed its first Free Trade Agreement with an Asian country, which is geographically located in a strategic position. Singapore was the seventh main destination for Brazilian exports of fuel, oil, meat, pig iron, ferroalloys, and vegetable in 2022.
The conclusion of the Agreement was a result of five years of negotiations, particularly intensified this year, and it includes topics such as trade in goods and services, investments, micro and small businesses, government procurement, intellectual property, sanitary, phytosanitary, and e-commerce measures.
Once it enters into force, tariffs levied on all products imported by Singapore from Mercosur countries will be eliminated immediately, and Mercosur will grant exemption to 95.8% of goods originating in Singapore. This concession will be made gradually over a period of up to 15 years.
One of the main advantages of this agreement lies in the rules of origin, which involves more efficient and less bureaucratic measures. Special attention has been paid to the electronic exchange of information between customs offices, speeding up processes and reducing potential frauds.
In the area of government procurement, the Agreement guarantees access to Singapore's public procurement market for Brazilian companies. Brazil, however, has reserved some exceptions in its offer in order to protect strategic sectors and implement public policies aimed at micro and small companies.
In terms of trade remedies, the Agreement provides for the possibility of applying bilateral safeguards for a period of two years, with the possibility of a one-off extension, in cases of import surges resulting from bilateral liberalization that could injure domestic industries.
After signing, the next step is the Agreement’s approval by Parliaments of Singapore and the Mercosur member countries, ratification, and then it will enter into force.
