A major new trade agreement between Singapore and Sri Lanka promises to have a significant economic impact on both of these partner nations, helping Singapore-based companies to enjoy a $10 million savings on tariffs right out of the gate while opening up new opportunities and leverage to Sri Lanka-based organizations that want to make the most of Singapore’s incredible reputation in the world of global commerce.
And that’s just the tip of the iceberg for both of these partner nations!
Singapore and Sri Lanka have been on very friendly terms with one another for quite a while now, and this latest trade agreement (the Sri Lanka/Singapore Free Trade Agreement) that was signed on January 23 of 2018 is only going to deepen the relationship and the economic ties that both nations have with one another – all in an effort to facilitate improved trade between these countries.
Right out of the gate, both Singapore and Sri Lanka-based organizations (especially startup and technology companies) are going to gain much greater access to one another’s marketplaces in a way that just wouldn’t have been quite as simple or as straightforward previously.
The Singapore Ministry of Trade and Industry reports that this can mean millions and millions of dollars moving back and forth between both nations and both economies in the first year alone, and decade-long predictions are very favorable to both of these Southeast Asian economies.
One of the biggest benefits of this agreement for the people of Singapore and Sri Lanka is the elimination of tariffs on almost 80% of all exports coming from Singapore. This is going to result in the $10 million of savings highlighted above (annually), but it’s also going to help Sri Lanka-based consumers save a lot of money on all of their purchases of Singapore exports as well.
According to the Ministry of Trade and Industry, the agreement also has one of the most liberal rules of origin of any trade agreement around the world. This is going to help Singapore and Sri Lanka-based exports qualify for even lower tariff rates, helping companies based in both countries succeed and spend a lot less money importing and exporting their goods between these nations with consumers saving quite a bit of money as well.
The agreement also includes the very first treaty commitment from Sri Lanka as far as government procurement is concerned. The new treaty promises to allow Singapore-based companies to bid on projects that are to be conducted or overseen by several of Sri Lanka’s largest state-run organizations or enterprises.
This part of the agreement alone could end up being worth hundreds of millions of dollars over the short and long-term of the deal and was a cornerstone of the agreement designed to help support both economies moving forward.
At the end of the day, the treaty was conceived of to not only help big businesses in both countries but also startups and small to medium-sized operations. Investors, financial insiders, and entrepreneurs are all going to be able to leverage the benefits of this new treaty for years and years to come.