MEPs, meeting in plenary on Wednesday 13 February in Strasbourg, broadly supported the free trade agreement (FTA - 425 votes in favour, 186 against, 41 abstentions) and the investment protection agreement (IPA - 436 in favour, 203 against, 30 abstentions) that the European Union has concluded with Singapore. This vote marks the end of a long and winding journey of nearly a decade. They also gave the green light to the Partnership and Cooperation Agreement.
Despite this comfortable majority, these agreements are not unanimous in Parliament.
Historical agreements
In his reports, together with the agreements (431 votes in favour, 189 against and 42 abstentions for the FTA - 427 votes in favour, 196 against and 46 abstentions for the API), David Martin (S&D, British) defends progressive treaties. During the plenary debate, which took place the previous evening, he recalled the special relationship between the EU and Singapore, where more than 10,000 European companies are already operating.
As a regional trade hub, Singapore's market access provides a gateway to the dynamic Southeast Asian region. The President of the Commission, Jean-Claude Juncker, thus welcomed, on the same day, a vote that "marks a historical moment". "This is the European Union's first bilateral trade agreement with a Southeast Asian country, a building block towards a closer relationship" with the region, he said.
Singapore will eliminate all tariffs on European products, and 80% of imports from Singapore will enter the EU duty-free as soon as the FTA enters into force.
As soon as a registration system is established in Singapore, 196 European geographical indications (GIs) will be protected.
The agreement also includes elements that Parliament has always defended, Martin said. He cited the precautionary principle, a positive list for services, the protection of public services, the defence of European technical, sanitary and phytosanitary standards, commitments to the environment, forest and fisheries resources. A role is also reserved for civil society in monitoring the implementation of the agreements.
Finally, the peninsular state has committed itself to implementing the Paris Climate Agreement. And it would already be working on the ratification of three fundamental conventions of the International Labour Organization (ILO).
As for the IPA, many MEPs agree that the investment court system (ICS), which will replace the 13 bilateral investment treaties, corrects some of the shortcomings identified in the investor-state dispute settlement system (ISDS).
There is now a permanent court, composed of competent and independent judges and subject to a code of conduct, transparent procedures, an appeal mechanism and the protection of the right of States to regulate.
The shortcomings of the FTA and the flaws of the ICS
The amendments submitted by MEPs from the GUE/NGL and Greens/EFA groups were not accepted. They covered, among other things, the liberalisation of financial services and prudential exceptions (see EUROPE 12190, 12152). In addition, MEPs in these groups deplore the fact that the chapter on sustainable development does not provide for sanctions in the event of infringements.
But it was the ICS mechanism, contained in the IPA, that met with the most opposition. Some groups, including the Greens/EFA, prefer to wait for a multilateral solution and the creation of a multilateral investment court (MIC) within the framework of UNCITRAL (United Nations Commission on International Trade Law).
Other members point to the weaknesses of the ICS, including the fundamental asymmetry that is at the heart of the system. "This agreement has one major weakness, that I believe should be addressed in future investment agreements: it gives investors rights, but it gives them no obligations." Mr Martin acknowledged.
Some MEPs, including Ska Keller (Greens/EFA, Germany), advocated waiting for a multilateral solution and the creation of the MIC.
Finally, the opposition also crystallised around European trade policy. Thus, the French ecologist Yannick Jadot argued, during the debate, against the very principle of investment courts, indicating that the development of populism in the EU was "fuelled by the transfers of sovereignty from citizens to multinationals, which you [the EU, ed.] are constantly organising". "It undermines democracies [...] and kills the European project", he concluded.
As for the Singaporean partner, while its economic dynamism is beyond doubt, the shortcomings of the city-state in terms of respect for the rule of law, including the severe restriction of certain fundamental freedoms, are widely debated among MEPs.
The European Parliament also gave its approval (537 votes in favour, 85 against, 50 abstentions) to the conclusion of the Partnership and Cooperation Agreement (PCA) between the EU and Singapore.
In the report by Antonio López-Istúriz White (EPP, Spain), together with the agreement they adopted (539 in favour, 84 against, 50 abstentions), MEPs welcome the conclusion of the PCA as "strategically important".
According to them, this agreement will provide "a legal framework for the long-standing bilateral relations between the two sides, with a commitment to strengthen and broaden cooperation in regional and international fora and in areas such as environmental protection, stability, justice, security and development", but also respect for human rights.
Next steps
The EU Council can now proceed to conclude the agreements. The IPA will have to be ratified by both the EU and the individual Member States, in accordance with their internal procedures.
Many of them will await the opinion of the Court of Justice, probably in May, on the compatibility of this judicial mechanism with EU law (see EUROPE 12182).
A winding journey of nearly ten years...
Bilateral negotiations with Singapore were launched in 2010, following a failure to negotiate directly with its 'natural' partner, the Association of Southeast Asian Nations (ASEAN), as the members of this regional group have too heterogeneous levels of economic development and democratic maturity.
In order not to remain on the sidelines, the EU has opted for a new strategy, consisting of 'weaving' bilateral agreements with ASEAN members, which can, in due course, be aggregated at regional level.
Negotiations with Singapore were completed as early as 2014. However, a dispute over trade policy powers had arisen since the Council with the European Commission, which had sought the opinion of the European Court of Justice.
In May 2017, the Commission had established that the agreement covered so-called "mixed" competences, i.e. competences that fall within the competence of both the EU and its Member States. The Commission then decided to split the agreement into an 'EU only' FTA and a mixed IPA, which will include the new version of the investment tribunal mechanism integrated into the trade agreement with Canada (CETA). (Original version in French by Hermine Donceel with Camille-Cerise Gessant)