Facts and figures: EU trade agreement with Singapore
European Commission - MEMO/12/993 16/12/2012
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Brussels, 16 December 2012
Facts and figures: EU trade agreement with Singapore
After more than two years of talks, the European Commission has concluded the negotiations for a free trade agreement with Singapore. The deal offers real opportunities for EU exporters in Singapore and sets new standards. It will level the playing field in Singapore and is a stepping stone to greater engagement across South-East Asia.
Putting Europe on the map in Asia
Global competitors from the US or Asia already enjoy preferential access to Singapore's market. The EU-Singapore trade deal will level the playing field in Singapore and give EU businesses comparable, or in certain sectors of high European exporting interest, even better access than to our partners.
The dynamically growing markets of Southeast Asia offer new sources of growth for EU businesses. With €205 billion of trade in goods and services in 2011, the ten-member ASEAN group is already the EU's third largest trading partner outside Europe. An external study (2009) estimated that the EU income gain from an FTA with ASEAN would be €29.5 billion. Singapore being the EU's largest trading partner in that region, accounting for a third (€74 billion) of all trade in goods and services between the EU and ASEAN, this FTA has significant potential for the European economy.
Singapore is the entry gate for most EU companies wishing to do business in Southeast Asia. Some 8,800 EU companies are present in Singapore and use it as a hub to serve the Pacific Rim. These companies are active in many manufacturing (from electronics via pharmaceuticals and transport equipment to green technologies) and services (transport and logistics, engineering, finance, legal and other professional services) sectors.
Main elements of the trade agreement
Improved opportunities for trade in services
The services chapter of the trade deal is set to become a new benchmark in services negotiations: Both sides will undertake a far-reaching liberalisation of their services markets.
The EU has sought Singapore's best current commitments and has additionally obtained valuable new commitments in a range of sectors: telecommunications, environmental services, engineering and architectural services, postal services, maritime transport, and computer services. European service suppliers will thus enjoy the most preferential conditions for access to Singapore's market.
These rules are accompanied by disciplines on non-discrimination and transparency so as to create predictability and a level playing field in key sectors. Many of these rules reflect important elements of the EU acquis and advanced disciplines discussed in the WTO. The FTA also ensures that licensing requirements are not used to obstruct market entry. The agreement also sets out detailed procedures aiming at recognising mutually professionals of both sides.
For those sectors in financial services (like wealth management, wholesale banking, investment banking and insurance) which are most interesting for EU financial institutions, the EU obtained commitments which are at least on a par with what the US obtained in its free trade agreement with Singapore.
Investment protection at EU level
In light of the strength of mutual investment ties – Singapore accounts for three quarters (€190 billion) of EU-ASEAN investment ties – the country is among the EU's first foreign partners to negotiate an investment protection treaty, based on a new competence under the Lisbon Treaty. Discussions in this area have started later and it is hoped that they can be completed by summer 2013.
Public Procurement – Better access to public tenders
Singapore will grant EU bidders significantly more guaranteed opportunities in public tenders compared to any other country, including for the first time in many utilities sectors in which the EU has many leading suppliers. Both sides also agreed on rules on transparency and non-discrimination going beyond the WTO Government Procurement Agreement (GPA). This will give EU suppliers an extra edge when competing in Singapore's procurement market.
Trade in Goods – Reducing non-tariff barriers in key industries
For the first time, Singapore has agreed to tackle technical barriers in key sectors such as cars, electronics and renewable energy equipment. These rules will make it easier for goods produced and tested to European standards to be sold in Singapore, without technical changes or additional testing.
Singapore will also facilitate the recognition of EU meat producers. Such recognition is currently only granted on an establishment-by-establishment basis, which is excessively burdensome and costly especially for smaller establishments.
Intellectual Property Rights including Geographical Indications
Singapore will introduce a new register for regionally-specific and recognised foodstuffs, wines and spirits, known as Geographical Indications. This would offer a high level of protection to the EU's most valuable geographical indications on the Singaporean market, such as Bordeaux wine or Parma ham. This is important in a region where there is considerable competition from third country producers, in particular for meat and dairy products.
As both EU and Singapore value innovation, they agreed to a high level of Intellectual Property Rights protection. The Agreement would, among other things offer better remuneration rights for certain creative activities.
The Agreement also contains strong rules on the enforcement of intellectual property rights. It does not foresee criminal sanctions.
The principles of sustainable development in trade will be enshrined in the FTA, so as to ensure that trade supports environmental protection and social development, and does not come at the expense of the environment or of labour rights. To oversee this, the Parties will establish a Board on Trade and Sustainable Development, and involve civil society in this process.
Other regulatory issues
The Agreement would have comprehensive rules on competition and state aid. The FTA would subject the most distortive types of subsidies to binding dispute settlement.
The FTA contains a transparency chapter, which will give stakeholders the opportunity to present their views on relevant draft bills, before these are adopted.
The FTA will provide business with a more efficient and expeditious dispute settlement mechanism, which is faster than compared to the WTO dispute settlement in the WTO system. The Agreement also provides further for the possibility to resolve any differences of view between the Parties through the assistance of a mediator.
The EU's first 'green FTA'
The Free Trade Agreement has been especially designed to promote green growth, in line with the EU's "2020 strategy" for a competitive economy. A novel discipline to tackle barriers to trade and investment in renewable energy generation has been developed. In addition, there are solid commitments on environmental services, new rules on green tendering as well as provisions on cooperation to address illegal fishing and timber.
The free trade agreement has been finalised by the political heads of the negotiating teams, EU Trade Commissioner De Gucht and Singapore's Minister of Trade and Industry Lim. Both sides will now seek endorsement from their respective political authorities and envisage initialling the draft agreement in Spring 2013.
On the EU side, the Agreement will be debated by the Council and the European Parliament.
Singapore is a major trading partner for the EU
Singapore is the EU's largest trading partner in Southeast Asia. It accounts for
The EU is Singapore's biggest export destination, ahead of China, the US and other ASEAN countries.
EU-Singapore trade is growing dynamically:
Singapore is Asia's second largest investor in the EU:
EU-South Korea Free Trade Agreement:
Memo on Free Trade Agreements (in relation to procedures for conclusion)