Last week, the EU Parliament supported a free trade agreement between the European Union and Singapore. This is the first agreement of its kind concluded between the European Union and a country of the Association of Southeast Asian Nations (ASEAN). It will allow virtually all tariff and non-tariff barriers to be removed.
On 19 October 2018, after eight years of negotiations, representatives of the European Union and Singapore signed a Free Trade Agreement (FTA) and a mutual investment protection agreement. The decision to conclude them was supported by the EU Parliament last Wednesday. These agreements will enable virtually all tariffs between partners to be eliminated within five years. Singapore is the EU’s largest trading partner, accounting for almost a third of all trade in goods and services between the EU and ASEAN and about two-thirds of investment between the two regions.
The FTA will remove tariff and non-tariff barriers to trade in goods and services. It also contains provisions on intellectual property protection, investment liberalisation, public procurement, competition and sustainable development.
The agreement on investment protection, on the other hand, is intended to provide greater certainty for investors. It is intended to replace the 12 existing bilateral investment agreements between Singapore and the Member States of the European Community.
A step towards Asian markets
Both agreements represent a milestone in the development of EU trade with Asian countries. As we read in the European Parliament’s communication, they can serve as a model and starting point for further free trade agreements between the EU and other countries in this region of the world. This is particularly important because the EU can no longer rely on the US as a trading partner.
Once the text of the Trade Agreement has been accepted by the Council of the EU, it will enter into force on the first day of the following month, starting from the date of mutual notification and completion of the procedure by both parties. For investment protection and partnership and cooperation agreements to enter into force, they must first be ratified by the EU Member States.
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