The first bilateral free trade agreement between the European Union and Singapore became effective after being signed and ratified in November 2019. The “EU-Singapore Free Trade Agreement (EUSFTA)” provides businesses in the the two regions ease of access to each other’s market, replacing 12 existing bilateral investment treaties and establishing a common investment protection framework for all EU investors in Singapore.

Singapore is the EU’s largest trading partner in Southeast Asia, with more than 10,000 EU companies established in Singapore that utilise the location as a hub to the region. The total bilateral trade in goods amounts to more than EUR 53 bn, with trade in services between the EU and Singapore around EUR 51 bn.

The agreement, which marks the first bilateral trade and investment pact concluded between the EU and a member country of the ASEAN, is a reference point for agreements the EU is negotiating with other Southeast Asian countries. Since launching negotiations with Singapore in 2010, the EU started bilateral talks with Malaysia in 2010, Vietnam in 2012, Thailand in 2013, the Philippines in 2015 and Indonesia in 2016. Vietnam and the EU signed a trade agreement in June 2019. ASEAN has been gaining notice as a place to invest in the past several years – see Plasteurope.com of 30.05.2014.

Singapore is an important and growing hub for the EU chemical sector, according to the European Chemical Industry Council (Cefic, Brussels / Belgium; www.cefic.org). It reported a trade surplus with Singapore on chemicals of EUR 2.2 bn. EU chemical exports to Singapore have quadrupled over the last 10 years, with petrochemicals, speciality chemicals and consumer chemicals representing the main exports, said Cefic. The association representing the European chemical industry said the bilateral trade agenda of the European Commission “represents a good way forward to create opportunities for chemical companies.”

Singapore is also the number one location for European investment in Asia, where combined investment stocks reach EUR 344 bn in 2017, according to the EU. ASEAN is Europe’s third largest trading partner after the US and China. By entering into the force of agreement, Singapore removes all remaining tariffs on certain EU products. Over 80% of all products imported into the EU from Singapore now enter duty-free.

International standards are a key component in provisions of the trade agreement and serve as the conduit by which both sides agree to base their quality standards, technical regulations and conformity assessment procedures. For example, the use of relevant international standards eases the export or import of electronics by eliminating duplicative, burdensome and unnecessary conformity testing procedures with respect to product safety and electromagnetic compatibility.

“The idea is that a product considered to be safe to market in the EU should also be considered safe in Singapore”, according to the EU. Both sides agree to promote and look to international standards for vehicles and car parts, pharmaceuticals, medical devices and equipment for renewable energy generation. International standards in the agreement are likely certified in accordance with regulations from the United Nations Economic Commission for Europe (UNECE, Geneva / Switzerland; www.unece.org).