Singapore Guide – Singapore-UK Bilateral Investment Treaty: Status of Negotiations

Singapore and UK Launch Negotiations for Updated Bilateral Investment Treaty

Singapore had launched negotiations on an updated bilateral investment treaty (BIT) with the UK as part of the UK-Singapore Free Trade Agreement (UKSFTA) earlier this year. The negotiations seek to modernize the existing BIT to bring the bilateral investment relationship into step with the current international investment environment and rules.

Introduction

In March 2023, the UK and Singapore announced that their governments had launched negotiations on a new UK-Singapore Bilateral Investment Treaty (UKSBIT). The new UKSBIT will seek to provide “updated protections for investors venturing into the UK and Singapore markets.”

Trade Relationship between UK and Singapore

According to Singapore’s Ministry of Trade, the UK is the biggest European investor in Singapore while Singapore is the third-biggest Asian investor in the UK.

Data from the UK’s Department for Business and Trade stated that the total trade in goods and services between the UK and Singapore for 2022 totaled £20.2 billion (US$25.6 billion). Further, total UK exports to Singapore amounted to £13.2 billion (US$16.7 billion) with total UK imports from Singapore amounted to £7 billion (US$8.9 billion) for the same year.

As of 2021, UK investments in Singapore totaled £11.4 billion (US$14.5 billion) while Singaporean investment in the UK totaled £12 billion (US$15.3 billion), representing an almost three-fold increase from £4.1 billion (US$5.2 billion) in 2012.

Purpose of the New BIT

The proposed UKSBIT will replace the existing BIT between the two countries. The negotiations, which the two parties committed to under the UKSFTA, must be concluded within four years of the UKSFTA coming into force, which occurred in February 2022.

The first UK and Singapore BIT was adopted in 1975 with the aim of creating favorable conditions for nationals or companies of both countries to invest in each other’s territory. However, many clauses of this BIT are outdated, and updating the agreement was made a requirement under the UKSFTA.

Reforms in the New BIT

In 2020, the United Nations Conference on Trade and Development (UNCTAD) released the International Investment Agreements Reform Accelerator, which focuses on eight provisions commonly found in international investment agreements (IIAs) that are in most need of reform. The reforms remain in line with the UN’s sustainable development goals (SDGs) by providing SDG-oriented policy options and consider each country’s right to regulate IIAs.

1. Definition of investment
2. Definition of investor
3. National treatment
4. Most-favored-nation treatment
5. Fair and equitable treatment
6. Full protection and security
7. Indirect expropriation
8. Public policy exceptions

It is possible the new UKSBIT will take into consideration these reform proposals, providing updated definitions and scopes of key terms and protections.

A likely change in the new UKSBIT is the addition of provisions that strengthen each contracting state’s “right to regulate” the BIT. Such provisions may come under the “public policy exceptions” outlined in the accelerator.

In relation to states’ right to regulate, many new BITs have also removed provisions on investor-state dispute settlement (ISDS), a highly controversial mechanism. The current UK-Singapore BIT includes an ISDS clause, and it is likely that this will either be removed or recontextualized in the new UKSBIT.

Deepening UK-Singapore Trade and Investment Ties

A major impetus for the development of UK-Singapore relations is Brexit. Recent years have seen a bolstering of UK-Singapore economic relations with the adoption of agreements and treaties.

• UK-Singapore Free Trade Agreement (UKSFTA)
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP)

The UK’s accession to the CPTTP will supplement its existing FTAs with member countries, providing more business opportunities for British companies to access new consumer markets and vice versa.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 17: Partnerships for the Goals

The article discusses the negotiations between the UK and Singapore to update their bilateral investment treaty (BIT) as part of the UK-Singapore Free Trade Agreement. This relates to SDG 8, which focuses on promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. It also connects to SDG 9, which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. Additionally, SDG 17 is relevant as it emphasizes the importance of partnerships for achieving the goals.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product growth per annum in the least developed countries.
• SDG 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
• SDG 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources.

Based on the article’s content, the specific targets that can be identified are SDG 8.1, which focuses on sustaining economic growth, SDG 9.1, which emphasizes the development of sustainable infrastructure, and SDG 17.16, which highlights the importance of global partnerships for sustainable development.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Gross Domestic Product (GDP) growth rate
• Investment flows between the UK and Singapore
• Trade in goods and services between the UK and Singapore

The article mentions several indicators that can be used to measure progress towards the identified targets. These include the gross domestic product (GDP) growth rate, investment flows between the UK and Singapore, and trade in goods and services between the two countries.

SDGs, Targets, and Indicators Table

The table presents the findings from analyzing the article in terms of SDGs, targets, and indicators. It identifies the relevant SDGs (SDG 8, SDG 9, and SDG 17), their corresponding targets (8.1, 9.1, and 17.16), and the specific indicators mentioned in the article (Gross Domestic Product (GDP) growth rate, investment flows between the UK and Singapore, and trade in goods and services between the two countries).

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: aseanbriefing.com

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