The EU and Singapore settled a free-trade agreement (FTA) – the second deal of that kind between the supranational institution and a major Asian trading partner. The agreement is significant as last year EU-Singapore trade was worth about 74bn euros (£60bn; $97bn) and Singapore is the second largest Asian investor in the EU after Japan.
The European Commissioner for Trade, Karel De Gucht, and Singapore's Minister for Trade and Industry, successfully clinched the deal, which will help the liberalisation of financial services and EU exports of cars.
An official press release from European Commission stated that this deal –not yet signed by politicians- is one of the most comprehensive agreements negotiated by the EU – which signed an FTA with South Korea back in 2011- and that it will generate new business opportunities between European and Singaporean companies.
Similarly, De Gught highlighted that “Singapore is a dynamic market for EU entrepreneurs and an important wheel in driving trade in south Asia.” He added that this agreement is vital to accelerate the growth of EU exports.
The EU is Singapore's second biggest trade partner after neighbouring Malaysia, Reuters news agency reports. The plan is to initiate the FTA in early 2013.
The new agreement is expected to ease EU companies' access to Singapore's banking and financial services and to its public procurement markets. This is particularly relevant as Singapore is one of Asia's richest countries per capita.
Acceptance of common standards should also help European car exporters, which have been hit especially hard by the economic downturn. The recognition of EU's standards will cause the removal of non-tariff barriers such as the double testing of cars.
Even though Singapore has a population of just 5 million, the country is deemed as a gateway to the 600 million people in the fast-growing economies of the 10-member Association of South East Asian Nations (ASEAN).