“The first bilateral trade agreement with a Southeast Asian country” – Juncker, 2019
On the 19thof October 2019, the EU signed the first bilateral trade agreement with a Southeast Asian country: Singapore.
Singapore is the EU’s 14th largest trade in goods partner and the EU’s largest trading partner in the Association of Southeast Asian Nations (ASEAN). It represents nearly a quarter of the total EU-ASEAN trade in goods.
This Trade Agreement also known as the “new generation” agreement, includes commitments on safeguarding intellectual properties, liberalising investments, public procurement, competition and sustainable development.
Regarding investments, both parties have strong ties. The EU is the largest investor in ASEAN with more than half of its investments taking place in Singapore. This, constitutes more than a quarter of Foreign Direct Investment in Singapore coming from the EU-members. The Investment Protection Agreement (IPA) will replace all the existing EU Member State-Singapore treaties concerning this matter and will gather them under a single set of rules.
Topics covered in the FTA
Both parties agreed to ‘eliminate custom duties’. Singapore commits to remove all tariffs on certain products such as, alcoholic beverages and maintain the current duty-free access to other EU products.
In order to ‘ease regional and global value chain’, the FTA offers flexibility in the “rule of origin”. This is, each part can source some parts of their products from third countries, not avoiding however, the minimum conditions agreed on the qualification of the products.
Businesses that will benefit from the ‘removal of technical and non-tariff barriers’ cover a wide range of sectors but the followings ones can be highlighted as being the key sectors in this FTA:
‘Protectingintellectual property rights’ was another main concern. Copyright, trademarks, geographical indications, test data protection, Doha Declaration and enforcement will be strengthened. This will mean that products registered in Singapore, will benefit from the same level of protection as if they were in the EU.
Furthermore,‘Sustainable Development’ issues were also handled. The aim is to ensure domestic standards of labour and environmental protection in aspects such as corporate social responsibility, sustainability assurance schemes…
Another key point concernsthe‘Investment Protection Agreement’. The objective is to procure higher protection in investment matters, public health, safety and environment. It also discusses the setting up of a fully independent dispute resolution system.
The EU-Singapore Partnership and Cooperation Agreement (PCA) was also signed.The objective is to strengthen the foundations of a mutually-beneficial cooperation in fields such as science, engineering, computing, air service, maritime transport, telecommunications, among other sectors. Hence, it tries to give the chance of widening the market for EU companies in Singapore. Nonetheless, even if the ties are strengthened, each party will carry on establishing its own quality and safety standards.
Other aspects such as ‘enhancing custom operations’ or ‘bringing new tendering opportunities for EU bidders’ are also regarded in the FTA.
Spain in Singapore
This FTA will expect to imply a boost for Spain’s trade in a €350m of revenue. It is also expected that Spain will gain €586m in export value and €236m value in imports from Singapore.
Approximately 3,705 Spanish companies and 44,000 workers are expected to be positively impacted by the deal.
Spain’s main exports to Singapore are wind turbine parts, wine, fire hoses, ceramic tiles, car parts, glassware, stoves among others.
As regarded, this FTA will lead to new opportunities to Spain and the rest of the EU countries in Singapore and may become a bridge to future Trade Agreements with the rest of the ASEAN countries.