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Taiwan and Singapore Sign the ASTEP A Significant Boost for Taiwan's Quality Agricultural Products into Singapore and Southeast Asia


The Council of Agriculture indicated that following the signing of ANZTEC, the ASTEP was signed with Singapore on Nov 7th. Singapore is a crucial member of the ASEAN, TPP, and RCEP. The economic agreement between Singapore and Taiwan will strengthen significantly the economic ties between Taiwan and Southeast Asian countries. Furthermore, it will help the future signing of agreements with other countries, as well as the integration of Taiwan into regional economic zones. Moreover, Taiwan's agricultural export and farmers will benefit from the signing of the said agreement as more high quality agricultural products enter the Singaporean market and further expand to neighboring Southeast Asian markets easier.

Singapore is the 11th biggest export market and the 22nd largest importer of Taiwan's agricultural products. According to the Customs Administration Statistics, in 2012 Taiwan imported US$ 93.03 million worth of agricultural products from Singapore and exported US$ 94.17 million to Singapore. Products imported from Singapore are mainly tobacco products and processed foods, such as milk powder, baby foods, coffee creamer, margarine, shortening, animal feeds, and cocoa powder. As for the major products exported to Singapore include processed foods such as other food preparations, sugar-sweetened beverages, other baked foods, coffee creamer, and primary agricultural products such as frozen fish, orchids, and mushrooms.

The Council of Agriculture pointed out that the 3 parts in ASTEP which concern agriculture are: opening-up of markets, specific Rules of Origin (ROO) for agricultural products, and Sanitary & Phytosanitary Measures (SPS). Taiwan will maintain tariff rates on TRQ goods, such as rice, garlic, red beans, peanuts, and mushrooms. As for other important agricultural products, tariff rates will be removed or reduced gradually within 5 to 15 years in order to reduce possible impacts on Taiwan's industry. Singapore on the other hand has promised to lift all tariffs of their agricultural products when the agreement enters into force.

Since Singapore is a free-trade port, in order to prevent a third-party nation's product from taking advantage of the ASTEP tariff reduction, both countries have applied the ROO to products eligible for tariff reduction. Primary agricultural products (e.g. livestock meats and vegetables) must be farmed or grown in either Taiwan or Singapore to enjoy the zero or low-tariff rate scheme. As for processed foods made in Taiwan (e.g. juices and prepared foods), materials imported from other countries must be turned into products that increase the value by more than 40 percent in order to be eligible for tariff reduction or elimination.

Furthermore, the two nations have also agreed to strengthen bilateral technical cooperation on SPS. Ad hoc regulators will be assigned to negotiate together in order to further eliminate SPS barriers on agricultural product trade between the two countries, which will significantly increase Taiwan's top-quality agricultural products' export to Singapore.

According to the Council of Agriculture, since Singapore does not possess any large-scale primary agriculture production and Taiwan has already achieved to maintain the tariff rate for most TRQ products, the impact of the ASTEP on primary agricultural products is quite limited. On the other hand, the agreement will not bring significant direct benefits for Taiwan's agricultural products entering Singapore since most of those products along with processed goods are already tariff free (with the exception of 6 kinds of alcoholic beverages). However, Taiwan will benefit from strengthening bilateral cooperation with Singapore, and intensify the expansion of Taiwanese products in Singaporean market as well as in neighboring Southeast Asian markets.

The Council of Agriculture stressed that immediately after the signing of Agreement, it has informed relevant groups of the industry about the process and has also explained the government's policies of the agreement. In order to avoid the impact on Taiwan's agriculture and prevent a third-party nation's product from taking advantage of the ASTEP tariff elimination, the government will intensify ROO inspection on products originating from Singapore.