UK closes in on green accord with Singapore to boost trade, investment post-Brexit

The UK is in the final stages of negotiating a so-called Green Economy Framework agreement with Singapore, seeking to capitalize on its experience with new technologies to boost trade and investment post-Brexit. 

The accord, which will promote cooperation in green finance, energy, transport and infrastructure, is a first for the UK and helps underpin expansion plans of the nation’s firms in Southeast Asia, according to Kara Owen, British High Commissioner to Singapore. It follows a separate Digital Economy Agreement trade deal that came into force in June.

“That was something that was negotiated really rapidly,” Owen said in Singapore Thursday in a Bloomberg TV interview with Haslinda Amin and Rishaad Salamat. “That is the kind of thing we wouldn’t have been able to do as the UK when we were a member of the European Union, and again, like the Green Economy, it’s focusing on a really important part of our economy.”

Britain will be hoping such trade arrangements can help unlock the benefits of its decision to leave the European Union, which took effect in 2020. Bank of England Chief Economist Huw Pill suggested last week that while it remains too early to judge the full economic effect of Brexit, the UK is yet to see any positive impact.

That said, UK markets have been picking up recently. Stocks are trading at a record high, the pound has strengthened for four straight months against the dollar and the National Institute of Economic and Social Research said the UK will avoid a contraction this year in stark contrast to gloomier Bank of England and International Monetary Fund projections.

Southeast Asia may offer some solace. The number of UK companies that are based in Singapore has grown from 4,500 in 2019 to 5,700 now, Owen said, many of which are using the city-state as a base for expansion in the region. 

UK-Singapore trade was worth £18.5 billion ($22.4 billion) in the 12 months through July 2022, an 18% increase from a year earlier, according to the High Commission. Foreign direct investment from the UK to Singapore was £14.8 billion in 2020, and £13.5 billion in the other direction, while the trading relationships with Asia Pacific are worth over £109 billion in total.

Britain is also seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade accord. 

“The other member countries have been really positive about our membership and we’re going through intensive negotiations,” Owen said. “There’s another round of negotiation coming up soon and we’re hoping to bear down on the few remaining issues.”