7 October 2015
Local firms ‘should start push into TPP markets’
SINGAPORE — The conclusion of the landmark Trans-Pacific Partnership (TPP) deal comes at a perfect time for local businesses, given the Government’s recent push to help homegrown enterprises venture abroad, said business associations yesterday.
They have also urged small and medium enterprises to try to gain first-mover advantage in these foreign markets instead of waiting for the agreement to be ratified.
With history’s biggest free-trade pact, which covers 40 per cent of the world’s economy, now facing months of scrutiny by lawmakers in the 12 member nations before it comes into force, the Association of Small and Medium Enterprises said Singaporean firms should start exploring the formation of joint ventures with partners from these markets.
“We are not sure about the speed at which it will be implemented, but I would say that SMEs should not look at it as just a trade plan ... Go in and muscle into other markets and compete for a piece of domestic share of overseas markets,” said Mr Kurt Wee, the association’s president.
He added that the deal will boost sentiment across numerous local industries, such as manufacturing, logistics and engineering services, and businesses should “take action” while the TPP gets ratified.
“SMEs should ... try to fast-track themselves to some of the overseas markets,” Mr Wee said.
The TPP will phase out thousands of trade barriers on various goods and services. It will also establish uniform rules on corporations’ intellectual property and overhaul the system for settling disputes between nations and foreign countries.
The Singapore Business Federation (SBF) called on member nations to support the deal, while the American Chamber of Commerce (AmCham) in Singapore urged the United States Congress to give its nod of approval.
“While we welcome the conclusion of the TPP negotiations, we hope that the deal will be swiftly approved by all participating countries. Following this, we also need to have insights on the details of the trade pact to better examine what the benefits and implications for the Singapore business community are,” said SBF chief executive officer Ho Meng Kit.
He added that the TPP will pave the way for a Free Trade Area of the Asia-Pacific.
Noting that SMEs were a particular focus in the negotiations, AmCham Singapore chairman James Andrade said: “Increased regulatory coherence will be especially helpful for smaller firms that want to establish operations in multiple locations in the Asia-Pacific region.”
Ms Ingrid Sidiadinoto, managing director of global logistics provider UPS’ Singapore office, said the TPP will not only facilitate trade and investment between the Republic and its existing trade partners, like Malaysia and the United States, but also foster new links to less tapped markets such as Canada and Mexico.