The trade agreement is similar to the one that Singapore has with the European Union. The Asian city-state and the UK also intend to explore a digital economy agreement.

Singapore and the UK have signed a free trade agreement covering more than £17 billion ($30.4 billion) in bilateral trade in goods and services between the jurisdictions, media reports said.

The deal comes as the UK is racing to try and arrange an FTA with the European Union. Reports said that the Singapore/UK pact is similar to the FTA Singapore has with the EU.

The two countries also agreed to examine parts of a UK-Singapore digital economy agreement, with a view to launching negotiations on such a pact next year, according to the Business Times (of Singapore).

The nations also committed to start talks on and conclude an investment protection agreement within two and four years respectively of the FTA coming into force.

The FTA was signed in Singapore by Minister for Trade and Industry Chan Chun Sing and UK Secretary of State for International Trade Liz Truss.

The most direct impact of the FTA is to remove tariffs on 84 per cent of all tariff lines for Singapore exports to the UK upon the UKSFTA coming into force, with virtually all remaining tariffs eliminated by November 2024, which is the same timeline under Singapore's trade agreement with the EU, Chan was quoted as saying.

Truss was quoted as telling The Straits Times that the FTA comes into force on 1 January.

"We want to secure a Canada-style deal with the EU, but if we are not able to secure that we will trade with the EU on Australian-style terms. Neither of those two arrangements will affect the deal with Singapore, the deal with Singapore is done," Truss was quoted as saying.

Singapore, a former British colony that achieved independence in the 1960s, has become one of the world’s most important financial centres and an important wealth management hub in Asia-Pacific. Its fortunes are also seen as benefiting to some extent from the problems of Hong Kong, which this year fell under a new national security law from the mainland. Bank of Singapore, for example, opened a London office last year, and also has an office in Luxembourg.