The EU and Singapore yesterday submitted for approval one of the world’s most comprehensive free-trade agreements, which the EU sees as a stepping stone toward a wider deal with southeast Asia.
The chief negotiators of both sides presented the entire text of the agreement yesterday after initialing each page of the roughly 1,000-page document.
Subject to approval in Singapore and by the 28 EU member states and the European Parliament, the agreement should enter into force late next year or early 2015.
Trade in goods between the two topped 52 billion euros (US$70.4 billion) last year and in services 28 billion euros in 2011. Mutual investment has reached 190 billion euros.
The EU sees a free-trade deal as opening the door to a deal with other members of ASEAN, which has set a goal of economic integration by 2015.
The EU and ASEAN launched free-trade talks in 2007, but abandoned them two years later, the EU choosing instead to conduct bilateral talks with individual members.
The European Commission is already negotiating free-trade agreements with Malaysia and Vietnam, and it launched talks in March with Thailand.
Singapore has a population of just 5 million people, against about 600 million for the whole of ASEAN, but accounts for about a third of all EU-ASEAN trade and more than 60 percent of all investment between the two regions.
The deal goes beyond many other free-trade accords in committing to open up public procurement, an area where the EU has many leading suppliers, and agreeing on technical standards in areas such motor vehicles, electronics and green technologies.
For example, a car made according to EU standards would be accepted for sale in Singapore.
The EU also gains better protection of “geographical indications,” region-specific products such as Parma ham or champagne.
EU tariffs on virtually all items from Singapore would disappear over five years. Singapore has committed to its existing zero tariffs on EU imports.
Singapore is likely to benefit from reduced tariffs for pharmaceutical and petrochemical products.
In services, particularly financial, the agreement would ensure the right to sell directly or establish branches in each other’s markets.