S’pore takes a step closer to EU free trade pact
SINGAPORE — The Republic has taken a major step towards sealing a free trade agreement (FTA) with the European Union (EU) after the text of the pact was officially finalised yesterday following around two and a half years of negotiations.
The agreement, which now needs to be approved by governments on both sides in a process that could take more than a year, should pave the way for an increase in exports to Singapore’s second-largest trading partner.
Mr Keith Tan, Singapore’s chief negotiator for the FTA, said this deal is particularly significant as it covers all the member states of the EU rather than an individual country, which is more typical of bilateral FTAs.
“This means Singapore exporters will get easier access to and greater profits on trade with a total of 28 EU member states,” he said at a ceremony to mark the initialling of the 1,000 pages of the FTA. Last year, Singapore exported goods worth S$45.6 billion to the EU, according to the Ministry of Trade and Industry.
That could expand once the FTA is implemented, which will result in tariffs on Singapore exports being progressively eliminated. According to the Chief Economist Unit at the European Commission’s Directorate General for Trade, Singapore’s exports to the EU could rise by a total of about €3.5 billion (S$5.9 billion) over 10 years.
Among the key developments in this FTA is that processed Asian food products made in Singapore will be able to enter the EU without being subject to tariffs. This means that companies making items ranging from pork floss to fish balls will have the chance to boost their business in a market with huge potential.
Mr Rupert Schlegelmilch, the EU’s chief negotiator, noted that opening the door to such products will help a number of Singapore’s small and medium enterprises tap into an area with growth potential: “There is already a basic interest (in such food products). As we diversify and as people’s tastes move up too, they’ll buy more of these things if they’re readily available.”