After 11 rounds of negotiations, Singapore and the European Union have finally concluded the EU-Singapore Free Trade Agreement (EUSFTA). The two economies began the negotiation process in March 2010.
Although the Agreement will only be signed once all translations and verifications are completed, it is nevertheless pivotal in furthering bilateral relations between the two economies, and in turn for the rest of ASEAN.
Commenting further, Mr. Satish Bakhda, Head of Operations at Rikvin, a Singapore company registration specialist, said, “According to data from the European Commission, last year alone, bilateral trade between Singapore and the EU registered S$106 billion, representing a 7% growth from 2010. This makes the EU Singapore’s second largest trading partner last year and conversely, Singapore, the EU’s 13th largest trading partner.”
“In addition, there are 8,800 EU companies in Singapore and between 2009 and 2011, trade in goods and services between the two economies grew by 40% and 41% respectively. Once the Agreement comes into force, trade between both economies is set to prosper as well, benefiting both parties,” he added.
The EUSFTA is a comprehensive agreement that will allow EU and Singapore incorporated firms to enjoy greater market access and tap business opportunities in either markets via a framework for cooperation on trade, procurement, labor, environmental and sustainable development.
The headway made with the EUSFTA will not only contribute meaningfully to the Europe 2020 vision of emerging beyond the crisis, breaking new ground for a more competitive economy and in turn, creating wider employment opportunities; it will also pave the way for the conclusion of more fruitful FTA negotiations in ASEAN,”
– Mr. Satish Bakhda
In terms of trade in goods, the Agreement eliminates tariffs on nearly all goods, including agricultural products, electronics, industrial and renewable energy items, as well as pharmaceutical and medical devices. The Agreement also provides for opportunities in terms of trade in services in the financial, professional, legal, telecommunications and postal services.
Analysis by Rikvin shows as the inaugural bilateral Free Trade Agreement concluded by the EU with an ASEAN country, the EUSFTA is pivotal for the rest of ASEAN as well. In turn, it also reinforces Singapore’s strategic importance as a conduit to other Southeast Asian economies. Negotiations with Malaysia and Vietnam are already underway and preparatory talks have commenced in other ASEAN countries.
“For the EU, the conclusion of the EUSFTA cannot be understated, especially after the difficulty in negotiating an FTA with ASEAN as a region. The headway made with the EUSFTA will not only contribute meaningfully to the Europe 2020 vision of emerging beyond the crisis, breaking new ground for a more competitive economy and in turn, creating wider employment opportunities; it will also pave the way for the conclusion of more fruitful FTA negotiations in ASEAN,” affirmed Mr. Bakhda.