The European Union and Singapore have signed free-trade and investment protection deals to boost business ties amid rising disturbances to global trade.
Singapore said the deals, which have been under negotiation since 2010, would remove tariffs, cut technical barriers and provide better opportunities in services and government procurement.
Singapore’s third-largest trading partner was the EU last year with trade in goods exceeding US$71 billion, while the island republic is the EU’s largest Asean trading partner.
Brussels said it would remove tariffs on 84 per cent of Singaporean products and the remaining 16 per cent over the next five years. The investment-protection agreement is intended to replace earlier treaties and set up a new dispute-arbitration body for investors.
Singaporean Prime Minister Lee Hsien Loong and the European Commission president Jean-Claude Juncker promised to defend global free trade.
Lee, the world leader with the highest official wage at US$1.7 million a year, said he hoped the free-trade deal would pave the way for a broader agreement between the EU and Asean, although discussions remained in the early stages.
“The signature of the EU-Singapore agreements is a strong message by like-minded partners to defend and promote an international system based on rules, cooperation and multilateralism,” said Juncker, who heads the EU’s executive branch.
The free-trade deal, expected to come into force in 2019, enhancing protection and market access for services providers, investors and employers.
EU-Singapore trade grew to US$98.4 billion last year, constituting more than 10 per cent of the Lion City’s business.
The deal is expected to make Singapore’s exports to Europe more competitive, especially those in the pharmaceutical, electronics and petrochemicals sectors. Firms will also be able to export processed Singaporean delicacies like fishballs, ikan bilis (anchovies) and roti prata bread tariff-free up to a designated annual quota.
The trade deals “give Singapore companies greater market access to the EU and boost confidence for investors and entrepreneurs”, Lee posted on Facebook.
The Comprehensive Air Transport Agreement, an Asean-EU aviation deal that would connect more than 1 billion potential passengers, was in “much more advanced stages” with hopes for an agreement by the end of the year, Lee said.
There was also talk of EU-Asean deals on cybersecurity, climate change and “smart nation” initiatives, making up “quite a rich agenda”, Lee told the media in Brussels.
Singapore is hoping to boost aviation links with the European Union. Picture credit: Wikimedia
