South Korea and Singapore have initiated a new phase of bilateral cooperation, focusing on modernizing their Free Trade Agreement (FTA) and advancing nuclear energy collaboration. The announcement coincided with President Lee Jae-myung’s state visit to Singapore, marking the 20th anniversary of the FTA between the two countries, which was first implemented on March 2, 2006. The Ministry of Trade, Industry and Energy (MOTIE) of South Korea and Singapore’s Ministry of Trade and Industry exchanged a joint declaration to begin FTA improvement negotiations. The goal is to update trade rules, especially in supply chain and green economy sectors, to reflect current global standards.
The new cooperation impacts businesses in bio-pharmaceuticals, green economy, and aviation maintenance, as well as nuclear energy stakeholders. In supply chain collaboration, both countries will focus on bio and pharmaceutical sectors to strengthen resilience and establish a robust model. For the green economy, enhanced decarbonization efforts are expected to help South Korean companies enter ASEAN markets. Trade facilitation measures, such as improved customs procedures, are anticipated, and aviation maintenance, repair, and overhaul (MRO) cooperation will boost South Korea’s competitiveness in this sector.
Implementation began with the exchange of the FTA improvement joint declaration and the signing of a Memorandum of Understanding (MOU) on Small Modular Reactor (SMR) cooperation. Korea Hydro & Nuclear Power (KHNP) and Singapore’s Energy Market Authority (EMA) formalized the SMR MOU, marking the first nuclear cooperation agreement between a Korean company and a Singaporean government agency. Singapore has allocated approximately 5 trillion won from its Future Energy Policy Fund for SMR-related projects, aiming to address energy demand and carbon neutrality. KHNP is developing the Korean innovative SMR (i-SMR) for commercialization by the mid-2030s and will collaborate with EMA on feasibility studies, workforce training, and sharing best practices.
Frequently asked questions include: What are the main objectives of the FTA improvement talks? The talks aim to modernize trade rules and enhance cooperation in supply chain and green economy sectors. How will the SMR cooperation benefit Singapore? SMRs offer a viable energy solution given Singapore’s limited land and high population density, supporting its carbon neutrality goals. What is the timeline for these initiatives? The FTA improvement negotiations and SMR cooperation began in June 2024, with ongoing development and collaboration planned through the mid-2030s.
The policy actions taken by South Korea and Singapore reflect a strategic commitment to modernizing trade and energy cooperation. The FTA improvement talks and SMR MOU are grounded in practical needs, such as supply chain resilience and decarbonization. The focus on bio-pharmaceuticals, green economy, and aviation MRO aligns with current industry trends and regional priorities. Singapore’s investment in SMR technology and KHNP’s development timeline indicate a clear pathway for future collaboration. These measures are likely to enhance bilateral competitiveness and support sustainable development in both countries.