SINGAPORE - Consumers here and the local economy will both benefit when a landmark Singapore-European Union free trade agreement takes effect as early as next year.
Shoppers will find a greater variety of European goods in stores here while businesses will find it easier to do trade with Europe.
"The EU-Singapore economic relationship continues to go from strength to strength," Dr Michael Pulch, head of the EU delegation to Singapore, told reporters on Friday.
"This relationship will be given a further significant boost by the recently initialled EU-Singapore FTA," he added.
The FTA will lift Singapore's economic growth by an estimated 0.94 per cent over 10 years and boost local exports to the EU by ¤3.5 billion (S$5.9 billion) in that period, according to research by the European Commission's directorate-general for trade.
This figure would have likely under-estimated the benefits to the Singapore economy, said DBS economist Irvin Seah, who has had experience in trade talks and FTA negotiations.
Mr Seah said most economic models focus on tariff reductions, and it is hard to account for trade in services in such models.
Moreover, significant benefits from the FTA are likely to arise from non-tariff barriers such as hygiene checks and quality control inspections which are harder to quantify, he added.
Intangible gains will be seen too, noted CIMB economist Song Seng Wun, who said: "You're likely to see a greater variety of European goods in the supermarkets."
Consumers will enjoy greater access to good European food products, better pricing and assurance that what you buy is actually what it claims it is, said Dr Pulch.
He said: "You are sure if you buy Parma ham, it's actually coming from Parma and not any other place in the world which just labels it as Parma."
Procedures are also in place to ensure that some European companies' products are registered and protected here so consumers are not misinformed, said Mr Raffaele Quarto, the EU delegation to Singapore's head of economic & trade section.
One common example is Feta cheese which originally hails from Greece, he cited.
"If you produce Feta that does not come from Europe, at least you'll have to declare it clearly that it's not from Europe in order not to give wrong information to the consumer," he said.
Trade and investment links between Singapore and the EU continue to remain highly significant.
The EU is still Singapore's second-largest trading partner after Malaysia, while the Republic is the EU's fifth largest in Asia and the 14th most significant globally.
Last year, trade in goods between Singapore and the EU rose 9.7 per cent from 2011 to ¤51.8 billion.
These are largely concentrated in machinery and transport equipment, chemicals and manufactured goods.
The EU is Singapore's biggest trading partner in services, with the value in this area growing 17.3 per cent to ¤27.7 billion in 2011 - the most recent available figure.
The region is also the Republic's largest source of foreign direct investment, with a stock of ¤122.8 billion here in 2011.
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