Ms Helena König, Deputy Director-General for the Directorate-General Trade of the European Commission,
Ladies and Gentlemen,
1. A very good afternoon to all of you. It is my pleasure to join you this afternoon to discuss the opportunities that the EU-Singapore FTA can create for our businesses and how that will strengthen the partnership between the EU and Singapore.
2. As you know, we reached a major milestone last month, with the EU and Singapore signing the EU-Singapore FTA and Investment Protection Agreement, or IPA for short. I am glad that both agreements have since been sent to the European Parliament, which will hopefully provide approval in the first quarter of next year. Thereafter, the trade agreement can proceed to enter-into-force, while the investment agreement will continue to course through parliaments in the EU Member States.
3. Today’s session is intended to inform businesses of what to expect, so that you can make preparations ahead of time and be ready to make use of the two agreements when they come into effect. This is especially so for the trade agreement, which is expected to enter into force in 2019. There will be more outreach events next year for the same purpose.
4. To kick start our discussions, I would like to share my reflections on the significance of the EU-Singapore FTA and IPA for the EU and Singapore, as well as for businesses on both sides. I will start with the longer-term strategic considerations, before going into the immediate benefits for companies.
5. In end-2009 and 2010, the world was facing a global challenge. A financial crisis on a scale that had not been seen since the Great Depression was rippling across continents. Economies were reeling from disruptions to their financial markets and resisting the temptation to turn inwards and close themselves to the rest of the world.
6. It was during that period in time when Singapore and the EU came together to put together a trade agreement. We launched the EU-Singapore FTA negotiations in end-2009, and the first round of talks took place in 2010. Through our actions, the EU and Singapore sent a clear signal: As like-minded partners, we believed that free and open trade will continue to be the way to create opportunities and a better future. We knew that the financial crisis – as big as it was – will also come to pass. And when that happens, we want to be ready to seize the opportunities.
7. Today, almost a decade later, we are faced with a global challenge again, albeit of a different nature. This time, we see rising trade tensions and protectionist sentiments around the world. And once again, the EU and Singapore are sending a strong signal in support of free and open trade by signing the EU-Singapore FTA and IPA.
8. These are the first trade and investment agreements to be concluded and signed between the EU and an ASEAN country. They serve as strategic pathfinders to a future ASEAN-EU FTA that can benefit our companies and peoples by deepening region-to-region economic integration between the EU and ASEAN.
9. Today, there are already over 10,000 EU businesses based in Singapore, who are using Singapore as a launch pad into the rest of Southeast Asia. These include companies like Siemens, Bolloré Logistics, GlaxoSmithKline (GSK), and Lego, who have set up their regional offices in Singapore to access opportunities across our very diverse region.
10. For each of these companies straddling the EU and ASEAN markets, regional economic integration within ASEAN and the EU already yielded significant benefits. Region-to-region economic integration can bring further benefits. The potential is undeniable. On one hand, you have the EU – the world’s largest single market. On the other hand, you have ASEAN – a fast-growing market of over 600 million consumers, expected to become the fourth largest economic bloc by 2030.
Opportunities for the future
11. Apart from their longer-term significance, the EU-Singapore FTA and IPA are ambitious agreements that will immediately benefit companies once they enter into force.
12. Take trade in goods. Under the EU-Singapore FTA, the EU and Singapore have committed to 100% tariff elimination. In the first year of implementation, Singapore will remove tariffs on all EU products entering Singapore, while the EU will eliminate tariffs progressively over a period of 5 years. The EU-Singapore FTA will also provide flexible rules of origin for key exports including automobiles, chemicals, electronics, and pharmaceuticals. This recognises the increasingly integrated nature of global value chains and allows companies more flexibility to source parts from third countries while qualifying for tariff-free treatment.
13. The agreement also addresses technical barriers to trade that make it difficult for companies to sell their products in different markets. These include provisions on marking and labelling; reduction of duplicative conformity testing for a range of electronic goods; as well as the recognition of international standards for motor and vehicle parts, pharmaceuticals and medical devices.
14. These and other trade-facilitative provisions in the EU-Singapore FTA are expected to boost trade in goods between Singapore and the EU. According to a study commissioned by the European Parliament, the agreement is expected to boost trade in goods between Singapore and the EU by 10 per cent within five years of entering into force.
15. Apart from goods trade, the EU-Singapore FTA also contains provisions for trade in a modern economy, such as in the renewable energy sector, intellectual property rights protection, and e-commerce. By setting rules and standards in these areas, we can foster innovation and the creation of new industries.
16. For both EU and Singapore investors, the IPA will replace 12 existing bilateral investment treaties between Singapore and various EU Member States. It will give our investors enhanced investment protection and the confidence that they need.
Creating opportunities for companies big and small
17. I also wish to highlight another area of benefit that is sometimes overlooked. The EU-Singapore FTA and IPA will benefit companies of all sizes, including SMEs. By providing greater clarity and predictability in cross-border trade and investment, the agreements can help our SMEs to venture into the EU and Singapore markets.
18. Take the example of food producers and manufacturers, many of whom are SMEs. Small family-owned producers of quality food products, wine and spirits across the EU will benefit from Singapore’s enhancements to our Geographical Indications or GI regime. Under the EU-Singapore FTA, we will be establishing a GI Registry after the European Parliament has provided its approval. Once registered in Singapore, GIs will enjoy enhanced protection.
19. As for Singapore food manufacturers, many of them are SMEs. They will welcome the news that the EU-Singapore FTA marks the first trade deal to secure enhanced market access for Asian food products made in Singapore. Products like lap cheong – or “dried Chinese sausages”, and spicy ikan bilis – or “anchovies” can enter the EU without tariffs, subject to a quota. Just as we look forward to enjoying quality food products, wine and spirits from the EU here in Singapore, we hope EU consumers will enjoy distinctive Asian food products that are not available in their local markets. Be warned though – some of these can be very spicy and not something that the European palette is used to!
An even stronger Singapore-EU partnership
20. In conclusion, I am confident that the two agreements will translate into enhanced collaborations and exchanges between Singapore and the EU, bring about greater opportunities for businesses on both sides, and create quality jobs for our people.
21. At the same time, I am mindful that our work is not finished yet. We still need to count on our businesses to continue advocating for these two agreements, to ensure their smooth passage through the European Parliament. It is our hope that businesses can enjoy the benefits of the agreements sooner rather than later.
22. I look forward to an even stronger EU-Singapore partnership in this new chapter, and I wish you fruitful discussions today.