The agreement, which has been under negotiation since 2006, enshrines recognition of Singapore’s Halal certification across all GCC states. In total the free-trade agreement covers 93% of product categories, including all food and beverage products, making trade in them tariff-free.
“A key feature of the free trade agreement is the mutual recognition of Halal standards between Singapore and the GCC. I think this is what will give Singaporean exporters a competitive edge when they come to this region,” said Budiman Bin Mohamed Salleh, centre director for IE Singapore in Abu Dhabi.
Halal top priority
“The first question from potential customers will always be about Halal recognition; the second will be how quickly can the products be transported from Singapore to the region. Those are the two key concerns that many distributors have here. Most of the time, these issues are easy to resolve, because of the good logistics network we have between the GCC and Singapore,” he added.
Growth in food trade between the Gulf and Singapore has been growing strongly without the free-trade agreement, up an average of 10% a year since 2010. But the vast majority of the trade – US$182m – is between Singapore and the UAE, and Salleh believes the agreement will help the country’s food exports expand beyond the emirates.
“I’m very optimistic about the market for food products here. The FTA will make Singaporean companies more competitive in the market, but more importantly it will give consumers here more options in terms of what sort of brands and ingredients they can find. Again, it’s about the assurance of the Halal certification between the GCC and Singapore,” he said.
Beyond the UAE
One company hoping to grow its reach is Prima Taste, a maker of premium instant noodles. Currently the firm distributes its products to Spinneys, Waitrose and Al Maya supermarkets in the UAE, but is keen to break into the rest of the GCC.
“Dubai is a gateway to the Middle East – we want to be out there in Saudi Arabia, a huge market. Often people say it’s quite difficult to get into, but we’d be very interested in entering the market there. We’ve met with some potential Saudi distributors, so we’ll see where that goes. But certainly the aspiration is to go into all the GCC countries,” said Eric Sim, general manager of Prima Taste.
He also said the firm is developing its role in the ingredients trade: “We are also working with some potential local manufacturers, who have recognised the potential for Singapore products on the B2B side. If they want an authentic Asian sauce, it’s easier to get it from us, rather than go through the whole R&D process to develop it – we’ve already done all the work for them.”
According to Sim, the Halal certification will be an advantage in the region, given its importance to regional distributors and customers. He said this plays to Singaporean cuisine’s strengths, as its position between Muslim-majority Malaysia and Indonesia means most Singaporean food production is already Halal.
But Sim is also clear that for Prima Taste, authenticity comes first: “We specialise in authentic Singaporean food, so actually we will not modify for any taste around the world. The most frequent thing we get is it’s too spicy, especially in the US – or in the Philippines, it’s not sweet enough. For us, we remain as authentic as possible, from the ingredients to the final product – so if you want an authentic product, this is it.”