Singapore and Panama have begun talks on a free trade pact, the first between the wealthy Southeast Asian city-state and a central American country.
Singapore's government said on Tuesday it expected to complete a pact with Panama within in a year, reducing tariffs on two-way trade worth around S$2 billion ($1.2 billion).
Panama needs an economic boost. It has an $12-billion-a-year economy, a dynamic banking sector and the Panama Canal, which carries four percent of world trade, but some 40 percent of its 2.9 million population live in poverty.
Washington said in December it also intended to negotiate a free trade agreement with Panama. Its exports to Singapore consist mostly of fish products while Singapore ships petroleum products and electronics components to Panama.
Faced with shrinking investment returns on its traditional manufacturing industries, Singapore has signed free trade agreements (FTAs) with eight countries in nearly four years.
It has FTAs with the United States, Australia, New Zealand, Japan and the four-nation European Free Trade Association, which groups Norway, Iceland, Switzerland and Liechtenstein.
It is also negotiating deals with South Korea, Mexico, Canada, India, Sri Lanka, Jordan and Egypt. A Singapore trade mission is expected to go to Pakistan in April to follow up on Pakistan's proposal to do a pact with Singapore
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