EU-S’pore trade pact may come into force early 2015

PARIS — The European Union (EU) has entered the last stages of its internal negotiations for its free trade agreement (FTA) with Singapore and the process will probably be completed by year-end, opening up new frontiers for the already advanced economic partnerships between both parties.

This was said by Mr Etienne Oudut de Dainville, an assistant director at the French Treasury Department, who is in charge of trade policies and is involved in the FTA negotiations.

Speaking to Singapore reporters at the French Ministry of Finance and Economy in Paris, he added that the agreement can be implemented early next year. “The agreement has two parts — trade and investment. The trade agreement on areas such as goods and tariffs had been initialled last October. Talks for the investment part, with rules on investor dispute settlement and investment transparency, are still ongoing. My understanding is that we’re very close,” he said.

Once the agreement texts have been initialled, they will next have to be approved by the EU member states and the EU Parliament, which is set for elections later this month.

“But the new Parliament will be appointed in July and will start working in September. We are hoping to obtain its signatures by October and the exact implementation date will be decided after that,” Mr Dainville added. “At best, it could be Jan 1 next year, although we might need a few more months for other paperwork.”

First initiated in 2010, the FTA will be the next breakthrough for the robust trade relations between Singapore and the EU. The union is Singapore’s third-biggest trading partner and the largest source of foreign direct investment, with more than 10,000 European companies operating in the Republic, while Singapore is the EU’s biggest trading partner in South-east Asia.

Despite the close ties, there are still areas for further development and the FTA will address that, Mr Dainville said. “The main benefits are not so much in terms of tariffs since Singapore is already a very open economy. But we expect a real improvement in the EU’s market access to government procurement in Singapore, up from the 50 per cent (of total volume) allowed currently to potentially 75 per cent.”

New sectors such as infrastructure, renewable energy, urban solutions and telecommunications will also be further opened for European companies, he added, while rules will be relaxed for these companies to set up subsidiaries and hire non-citizens in Singapore.

“Another key implementation that we’re anticipating is geographical identification (GI) for certain agri-food products, especially our wine and spirits. It’s important because GI is key to branding and image, and such registration will protect the products’ ‘intellectual property’, if you will.”

For the Republic, an FTA with the EU will boost its standing as a major player in global economy.

“Singapore is a regional economic hub and deeply rooted in the global trade value chain. To remain so, it will need to be closely linked to all major trade and investment areas worldwide. Along with the Trans-Pacific Partnership, the FTA with EU will really consolidate Singapore’s position as a centrepiece to global trade,” Mr Dainville said.

Singapore’s Minister for Trade and Industry Lim Hng Kiang made the same observations earlier this month. “As a business hub, it is imperative (for Singapore) to give businesses the flexibility to source inputs for various countries … and configure their supply chains in the most economical way,” he said at the Europe Day celebration lunch. “For this reason, Singapore has been a long-standing proponent of free and open markets … the EU-Singapore FTA is a much-welcomed addition to our vast network of FTAs.”