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    Breaking News

    EU and Singapore Sign Free Trade Agreement

    EUSFTA expected to boost trade 10%

    10.22.18

    Singapore and the European Union (EU)  have reached a landmark trade deal that will eliminate tariffs and give businesses across various sectors, especially small- and medium-sized enterprises (SMEs), better market access.

    Taking place on the sidelines of the 12th Asia-Europe Meeting (ASEM) Summit in Brussels, the EU-Singapore Free Trade Agreement (EUSFTA) was signed by Prime Minister Lee Hsien Loong with European Commission president Jean-Claude Juncker, European Council president Donald Tusk and Austrian Chancellor Sebastian Kurz. Austria is the current president of the EU Council.

    The leaders also witnessed the signing of the EU-Singapore Investment Protection Agreement (EUSIPA) – a pact that will replace 12 existing bilateral investment treaties between Singapore and EU member states to offer better investment protection – and the EU-Singapore Partnership and Cooperation Agreement (ESPCA).

    The 28-member European bloc is Singapore’s biggest foreign investor, as well as the third largest trading partner with bilateral trade in goods exceeding S$98 billion last year. The EU was also Singapore’s largest market for services trade at more than S$74 billion in 2016.

    On the other hand, Singapore is the EU’s biggest trading partner in goods and services within Southeast Asia.

    The newly signed EUSFTA is expected to boost trade between Singapore and the EU by 10% within five years of entering into force. Singapore will eliminate tariffs on all EU products entering Singapore, the EU will also remove tariffs on 84% of Singapore products entering the EU, and do so for the remaining 16% over the next three to five years.

    The deal also includes flexible rules of origin for key exports such as automobiles, electronics and pharmaceuticals from Singapore and the EU into each other’s markets.

    Notably, the EUSFTA will have the concept of “ASEAN cumulation” for key exports from Singapore. This means that materials sourced from other ASEAN member countries can now be deemed as originating from Singapore and qualify for tariff concessions.

    It also marks the first bilateral trade deal to secure enhanced market access for Asian food products made in Singapore. Products like roti prata can now enter the EU without tariffs, up to a combined quota of 1,250 tonnes annually.

    Market access into a wide range of services sectors, including financial services and professional services, will also be enhanced, while Singapore firms can look forward to “sizable” government procurement opportunities at both the city and municipal levels.

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