Vilnius, 20/09/2013 (Agence Europe) - The trade agreement with Singapore - the first of the kind for the EU in the ASEAN region - will guarantee the EU significant gains for its services sector.
On Friday 20 September, the EU and Singapore initialled the free trade agreement that was concluded in December 2012. The initialling consolidates the negotiated agreement, which must still be approved by the political authorities of both parties. On the European side, approval of the European Council and then the European Parliament will have to be obtained. This involves a period of time which could put the effective implementation of the agreement back until 2015.
The agreement with Singapore - the top economy of the ASEAN bloc - will offer new opportunities, for the European side, in the services sector - insurance, banking and financial services, telecommunications, postal services and maritime transport - and in public procurement. The commitments by the two parties with regard to services and public procurement go beyond their commitments taken at the WTO. Besides the improved regulatory framework agreed by the two parties to govern trade in different services sectors, the agreement provides for transparency and non-discrimination for licensing agreements and qualification procedures, as well as for the mutual recognition of professional qualifications.
The agreement will facilitate the access of industrial and agricultural products through improved recognition of EU standards - Singapore will agree, for example, to import vehicles manufactured in Europe on the basis of European standards and technical and safety agreements. Many technical barriers will be removed, such as the duplicate testing requirements in key sectors of bilateral trade - including motor vehicles, electronics or certain green technologies. With regard to agriculture, the EU's controlled designations of origin will be better protected.
The agreement also comprises a chapter on the sustainable economy, which is environmentally-friendly. The chapter provides for the boosting of trade and investment in environmental technologies and renewable energies, and the promotion of green public procurement. Duties on some environmental goods will be immediately abolished.
Lastly, the agreement will open up new opportunities for foreign direct investment (FDI) and will offer a high degree of legal protection. The EU and Singapore are still continuing their negotiations on the investment chapter, which began at a later date. The objective is to integrate this into the agreement before it is definitively adopted.
Singapore accounts for nearly a third of the trade between the EU and the ASEAN bloc, and for nearly 60% of the investments between the two regions. Trade in goods and services between the EU and Singapore stood at €80 billion in 2012 (€52 billion for goods, €28 billion for services), with a surplus of over €13 billion to the advantage of the EU28. The stock of bilateral investment stood at €190 billion in 2010.
An economic analysis compiled by the European Commission predicts significant gains for both partners over a period of 10 years - a rise in exports of €1.4 billion for the EU and of €3.5 billion for Singapore, and increases in GDP of €550 million for the EU and of €2.7 billion for Singapore.
Besides the bilateral economic effects, the EU-Singapore free trade agreement opens the door to other agreements of the type in South East Asia, where the EU is currently pursuing negotiations with Malaysia, Vietnam and Thailand, preliminary discussions with Indonesia and the Philippines, and will negotiate a partnership and cooperation agreement, including a trade section, with the Sultanate of Brunei. (EH/transl.fl)