SINGAPORE - The free trade agreement (FTA) between Singapore and the European Union (EU) is an important agreement for both parties that will pave the way for improved trading links between the EU and all of Asean, said Singapore chief negotiator Keith Tan.
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Here is the full press release from the Ministry of Trade and Industry:
EUROPEAN UNION-SINGAPORE FREE TRADE AGREEMENT MOVES ONE STEP CLOSER TO RATIFICATION
The European Union (EU)-Singapore Free Trade Agreement (EUSFTA) has moved one step closer to ratification with the finalisation of the legal text today. The legal text of the Agreement was initialled by Chief Negotiators from Singapore and the European Union (EU), Mr Keith Tan and Mr Rupert Schlegelmilch. This is a significant milestone for Singapore and the European Union, in deepening the Singapore and EU bilateral and economic relations.
The EUSFTA is a comprehensive agreement with extensive commitments by EU and Singapore to provide even greater access to both markets. It is the first bilateral Agreement concluded by the EU with an ASEAN country and the second Agreement between the EU and an Asian country, after South Korea.
The Agreement scores many firsts. It allows processed Asian food products made in Singapore, such as chicken and pork floss, samosa (fried/baked pastry with a savoury filling), canned luncheon meat, shaomai (Chinese dumpling), fish balls and crab balls to enter the EU tariff free within an annual quota.1 It is also the first bilateral FTA with an ASEAN cumulation concept, where Singapore manufacturers will be able to count the use of raw materials and parts sourced from other ASEAN member countries to determine whether their exports can enjoy the tariff concessions. This is also the EU's first green FTA, where Singapore and EU will make commitments to encourage more sustainable development in trade.
Mr Tan said, "We are very happy with the significant progress made in securing such an extensive agreement. This is an important FTA for Singapore and will further strengthen the strong ties Singapore already enjoys with the EU. Unlike other typical FTAs in which bilateral free trade occur between two specific countries, the EUSFTA covers all EU Member States. Not only will Singapore businesses be able to gain easier access to markets in 28 EU Member States but EU companies can also leverage on Singapore as a gateway and hub to do business across Asia. "
"We are pleased to present today one of the most comprehensive free trade agreements ever negotiated, and to submit it to our respective authorities for approval", said Rupert Schlegelmilch, the EU's chief negotiator of this trade agreement. "The EU and Singapore are already trading €1 billion worth of goods every week, and the agreement lays the foundations upon which business ties can prosper further. This is also the first step towards closer economic ties between the two major integrated regions in the world, the Association of Southeast Asian Nations (ASEAN) and the EU, and their 1.1 billion citizens."
Benefits for companies
The EUSFTA is an ambitious agreement that will allow both Singapore and EU firms to enjoy greater market access and business opportunities. Based on Singapore's latest bilateral trade figures in 2012, S$23.2 billion worth of Singapore goods (representing 80% of all EU tariff lines) will qualify for immediate tariff free treatment, while the remaining S$4.3 billion worth of Singapore goods (representing 20% of tariff lines) will qualify at three or five years after the Agreement enters into force. Singapore-based exporters, particularly those in the electronics, chemicals, pharmaceuticals, machinery and processed Asian food products sectors, will stand to benefit from the removal of tariffs. Singapore will eliminate all import duties on goods of EU origin immediately upon the EUSFTA entering into force.
Other than big firms, Small and Medium Enterprises (SMEs), which form the backbone of the Singapore economy, can also reap the benefits of the FTA. Companies which export electronics, machinery, chemicals or processed Asian food products will enjoy enhanced market access into the EU. As the EU maintains relatively higher tariffs for processed foods, the benefits will be particularly useful for Singapore's food manufacturing companies, many of which are SMEs.
Besides eliminating import duties, the EUSFTA aims to eliminate and prevent non-tariff barriers to bilateral trade between the EU and Singapore. For instance, consumer electronics and telecommunication products that conform with relevant Singapore or EU standards can be sold in the respective markets without additional testing or certification requirements. This reduces business costs and products' time-to-market, benefiting just-in-time production networks of the 21st century.
The Agreement will also grant Singapore companies access to city-level and municipal-level government procurement opportunities in the EU, which has the largest government procurement market in the world. This is advantageous for companies with strengths in computer and related services, telecommunications services, land transport services, maintenance and repair services, sewage and refuse disposal, and architecture and engineering services.
Benefits for consumers
Singapore consumers will also benefit from the EUSFTA. Under Singapore's current regime, most imports already have duty free access, with the exception of some alcohol products. With the EUSFTA, consumers will be able to enjoy alcohol beverages such as beer and stout from the EU at a lower cost.
In addition, the EUSFTA will offer a high level of protection for commercially important European Geographical Indications (GIs). This will strengthen Singapore consumers' recognition of top-quality EU food products, wine, spirits and beers.
The EUSFTA also brings with it indirect benefits. The Agreement opens up new markets and greater access to services in 28 EU member states for Singapore companies. This may in turn create more and better quality jobs for Singaporeans.
Negotiations on the EUSFTA were concluded on 16 December 2012. The initialling of the EUSFTA signifies the finalisation of the legal text of the agreement. Following the initialling, the text will be translated from English into the 23 other official EU languages and be presented to the Council of the EU for its approval. Upon Council approval, the agreement will be signed and presented to the European Parliament (EP) for its consent. Once the EP ratifies the agreement, it may enter into force on a date mutually agreed between the EU and Singapore.
Meanwhile, companies are encouraged to follow the development of the EUSFTA closely, to explore how they can leverage on the Agreement to tap on new markets access and opportunities. The text of the Agreement will be made available on http://trade.ec.europa.eu/doclib/press/index.cfm?id=961 by 21 September 2013.