As EU’s third largest trading partner after US and China, ASEAN and EU launched a mutual agreement negotiation in 2007 region by region. On 19 October, 2018, The EU- EU-Singapore trade and investment agreements (EUSFTA) were signed and it is the first FTA concluded between the EU and an ASEAN country, which will bring a better access for both European and ASEAN markets.
As EU’s largest trade partner in ASEAN, Singapore is accounting for almost one-third of EU-ASEAN trade in goods and services, and it has been a major destination for European companies to invest and establish as regional headquarters or a hub to connect South East Asia.
The agreement will come into force after it is signed and ratified by both parties and the scope of this FTAs is expanding to include more issues of interest to businesses, such as e-commerce, intellectual property rights, competition, government procurement and dispute settlement.
- The EUSFTA is a comprehensive agreement covering market access for goods, trade remedies, customs & trade facilitation, trade in services and establishment, intellectual property rights, technical barriers to trade, sanitary and phytosanitary measures, government procurement, competition policy, sustainable development and dispute settlement mechanism. The EUSFTA also addresses non-tariff barriers to trade in four major sectors: electronics, motor vehicles and vehicle parts, pharmaceutical products and medical devices, as well as the renewable energy generation.
- The EUSFTA comprises 17 Chapters, one protocol and four understandings.
As indicated by the Ministry of Trade and Industry, key benefits including majority as following:
I. Tariff Elimination
1. Singapore will remove tariffs on all EU products entering Singapore. The EU will remove tariffs on 84% of all Singapore products entering the EU within the first year, and the remaining 16% over a period of 3 to 5 years.
2. The EUSFTA will provide for liberal and flexible rules of origin (ROO) for the EU’s and Singapore’s key exports to each other’s markets including automobiles, chemicals, clothing and textiles, electronics, machinery, pharmaceuticals, and petrochemicals.
3. The EUSFTA is the first bilateral FTA where Singapore has secured enhanced market access for Asian food products made in Singapore
II. Reduced Non- Tariff Barriers
1. Unnecessary technical barriers to trade (TBT) for Singapore and EU exporters which sometimes makes it difficult for companies to sell their products in different markets will be removed.
2. Provisions include rules on marking and labelling, reducing duplicative conformity testing for a range of electronic goods, promoting the recognition of international standards for motor and vehicle parts, and certifying systems for meat-producing establishments so that inspection of individual abattoir/food processing plants for companies to export their goods will not be required.
III. Trade-in Service Sectors
The EUSFTA provides enhanced market access for service providers, professionals and investors, and creates a level-playing field for businesses in each other’s markets, including through certain sectors pecific rules on non-discrimination and transparency.
The agreement covers a wide range of services sectors including financial services, professional services, computer and related services, research and development, business services, telecommunication services, environmental services, and tourism and travel related services.
IV. Government Procurement Opportunities
The EU will grant Singapore enhanced access to city-level and municipal-level government procurement opportunities, including computer-related services, telecommunications services, land transport services, maintenance and repair services, sewage and refuse disposal, and architecture and engineering services. Singapore will allow EU companies more opportunities to participate in public tenders in return.
V. Enhanced Intellectual Property Rights
To continue encouraging innovation, the trade agreement includes a comprehensive intellectual property rights chapter covering provisions on copyright, designs, enforcement and geographical indications (GIs).
VI. EU-SINGAPORE INVESTMENT PROTECTION AGREEMENT (EUSIPA)
The EUSIPA will replace the 12 existing bilateral investment treaties between Singapore and various EU Member States. It offers enhanced investment protection through modern provisions on investment protection that are not contained in the existing bilateral agreements.
VII. Investment Dispute Resolution Mechanism
The EUSIPA offers investors a new investment dispute resolution mechanism under which the EU and Singapore will set up a standing international, fully independent dispute resolution system.
Would you like to know any impacts or bring any opportunities to your particular product or services? What shall you do to benefit from this FTA? Please contact us now!