European Union–Singapore Free Trade Agreement Overview

The European Union–Singapore Free Trade Agreement is a significant trade pact between two major economic players in the region. It was signed in 2019 and entered into force on November 21, 2020.

The agreement aims to eliminate tariffs and other trade barriers between the EU and Singapore, creating a more seamless and efficient trade environment. This will benefit businesses and consumers alike, making it easier to import and export goods.

Singapore, a small but highly developed country, is a major trading hub in Southeast Asia, with a strong focus on innovation and entrepreneurship. The EU, on the other hand, is a global economic powerhouse with a diverse range of industries and a large market.

The EU-Singapore Trade Agreement entered into force on November 21, 2019.

Singapore, the EU's largest trading partner in Southeast Asia, will remove all remaining tariffs on EU origin products under this agreement.

80% of all imports from Singapore will enter the EU duty-free.

Tariffs on electronics, pharmaceuticals, petrochemicals, and processed agricultural products will be removed immediately.

Tariffs on certain types of textiles and carpets will be dismantled over three years.

Tariffs on bikes, fruits, cereals, and sports footwear will be removed over the next five years.

The agreement includes the concept of 'ASEAN cumulation,' which allows Singapore-based manufacturers to include components sourced from other ASEAN Member States as originating content.

Singapore-based manufacturers can determine whether a specific product meets the rules of origin requirements with the help of this concept.

The proof of origin at export from the EU must be provided by 'approved exporters' authorized by the customs authorities of a Member State of the Union.

The European Union–Singapore Free Trade Agreement (EUSFTA) has made significant strides in reducing trade barriers, particularly in the realm of tariffs and customs.

Under the agreement, each party has committed to reducing or eliminating customs duties on imported goods originating in the other party. This means that Singapore has eliminated its remaining tariffs on beer, stout, and samsu, while the EU has eliminated tariffs on 84% of all Singapore products entering the EU in the first year of implementation.

The EUSFTA sets out specific schedules for the reduction and elimination of customs duties, with the base rate of customs duties on imports to be applied under these schedules.

If either party reduces its applied most favoured nation (MFN) customs duty rates after the agreement's entry into force, the new rate will apply if it's lower than the customs duty rate calculated in accordance with the schedule.

Three years after the agreement's entry into force, the parties will consult to consider accelerating and broadening the scope of the reduction and elimination of customs duties on imports.

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The EU-Singapore Free Trade Agreement has significantly boosted trade and investment between the two parties. The agreement has eliminated customs duties on a significant portion of products traded between the EU and Singapore.

In 2022, the bilateral foreign direct investment (FDI) stock between the EU and Singapore reached an impressive €434 billion. This substantial figure underscores the deep economic ties and mutual trust between the two partners.

The EU-Singapore trade agreement also includes the concept of ‘ASEAN cumulation,' which allows Singapore-based manufacturers to include components sourced from other ASEAN Member States as originating content when determining whether a specific product can meet the rules of origin requirements.

Here are some key benefits for businesses:

The EU-Singapore Free Trade Agreement (EUSFTA) has had a significant impact on trade between the two regions. The total trade in goods and services accounted for €130 billion in 2022, with a sizeable positive balance of €6.3 billion.

Singapore emerged as the EU's 11th largest trading partner worldwide in 2022. The EU was Singapore's largest trading partner in ASEAN, and Singapore was the EU's 20th biggest trading partner in 2023 for trade in goods.

Trade in services has also been a key area of growth. In 2022, Singapore was the EU's fifth-largest trading partner for trade in services, with a total value of €77.6 billion. This highlights Singapore's importance as a key services hub for European businesses in the Asia-Pacific region.

Here are some key trade statistics:

The EU-Singapore trade agreement has also had a profound impact on investment flows between the two regions. In 2022, the bilateral foreign direct investment (FDI) stock between the EU and Singapore reached an impressive €434 billion.

Eliminating customs duties and taxes on exports is a key aspect of free trade agreements. Neither party to a trade agreement, like the one mentioned, is allowed to impose customs duties or taxes on goods exported to the other party.

The European Union-Singapore Free Trade Agreement (EUSFTA) is a great example of this, eliminating 84% of all tariffs for exports to the EU originating from Singapore, including for electronics. This means that Singaporean exporters can benefit from lower operational costs.

Streamlined testing and certification procedures are also a part of the EUSFTA, making it easier for Singaporean exporters to operate in the EU market. Non-tariff barriers across key sectors like electronics, motor vehicles, and pharmaceuticals have also been reduced.

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The Singapore FTA offers numerous benefits to businesses and the economy. The EU-Singapore Free Trade Agreement (EUSFTA) aims to improve market access for businesses from both Singapore and the EU.

One of the key objectives is the elimination of customs duties, which removes tariffs on a significant portion of products traded between the two parties. This can lead to lower operational costs and increased competitiveness for businesses.

The agreement also reduces technical barriers, making it easier for companies to sell their products in different markets. This can be a huge advantage for businesses looking to expand their customer base.

Singapore's market is opened up for EU services exports, including areas such as transport and telecommunications. This can create new opportunities for businesses in these sectors.

The EUSFTA also provides enhanced access to government procurement opportunities, both at the city-level and municipal-level. This can be a significant advantage for businesses looking to secure government contracts.

Here are some key benefits of the EUSFTA for businesses:

The European Union–Singapore Free Trade Agreement (EUSFTA) has made significant strides in improving market access for businesses in both regions. One notable example is the increased opportunities for Asian food products made in Singapore, such as lap cheong and sambal ikan bilis, which can now enter the EU tariff-free under flexible Rules of Origin.

The EUSFTA has also created a level playing field for businesses in each other's markets, particularly in the services sector. This comprehensive coverage includes a wide range of service sectors, including financial services, professional services, computer and related services, research and development, business services, telecommunication services, environmental services, and tourism and travel-related services.

Here are some of the specific service sectors covered by the EUSFTA:

The EUSFTA has also reduced technical barriers to trade, benefiting a wide range of sectors in both the EU and Singapore, including electronics, motor vehicles and vehicle parts, pharmaceuticals, renewable energy, and meat and meat products. For instance, Singapore now recognises current EU standards and testing on cars and car parts, eliminating the need for duplicate testing.

The agreement has also introduced the concept of Authorised Economic Operator, which streamlines customs procedures for trusted traders, facilitating trade by reducing bureaucratic hurdles and expediting the movement of goods between the EU and Singapore.

The European Union–Singapore Free Trade Agreement (EUSFTA) has made significant strides in opening up services and sectors to businesses from both regions. Singapore businesses now have improved access to a wider range of services sectors in the EU, including Professional Services, Business Services, and Tourism and Travel Related Services.

The agreement has also expanded opportunities in government procurement, allowing Singapore companies to bid for more government projects in the EU, including at the city and municipal level. This can significantly boost Singapore's service exports to the EU.

Singaporean companies can now bid for government procurement projects in the EU, including in sectors such as Computer and Related Services, Environmental Services, and Railway Services. EU companies, on the other hand, can bid for projects in Singapore in sectors like Computer-related services, Telecommunications services, and Land transport services.

Here are some key sectors open for bidding in Singapore:

Similarly, the EU has also opened up opportunities for Singaporean companies, adding to its list of entities open for bids additional central-level government ministries, agencies, and other bodies.

The services sector has experienced a significant boost under the EUSFTA. Singapore businesses now have improved access to a wider range of services sectors in the EU.

Services like professional services, business services, and tourism and travel related services are now more accessible to Singapore businesses. These include postal services, telecommunication services, transportation, computer and related services, environmental services, and railway services.

Singapore companies can now bid for more government procurement projects in the EU, including at the city and municipal level. This expansion of opportunities has the potential to significantly boost Singapore’s service exports to the EU.

A comprehensive list of services sectors that have seen improved market access includes:

The EU-Singapore Free Trade Agreement (EUSFTA) has had a profound impact on various sectors, from electronics to services. The agreement has reduced trade barriers, harmonised standards, and opened up new markets for businesses in both regions.

The electronics industry has seen significant changes, with Singapore now accepting a supplier's declaration of conformity for products deemed to be of low risk for consumer safety, health, or the environment.

The automotive sector has also been affected, with the EUSFTA allowing the sale of new motor vehicles and car parts from the EU in Singapore without additional testing or certification, provided they meet international standards.

The services sector has experienced enhanced market access under the EUSFTA, with Singapore businesses gaining improved access to a wider range of services sectors in the EU, including professional services, business services, and tourism and travel-related services.

The services sector has seen significant changes, with Singapore businesses gaining improved access to a wider range of services sectors in the EU. The agreement has opened up new opportunities in government procurement, allowing Singapore companies to bid for more government procurement projects in the EU.

The EUSFTA has expanded the types of public service contracts covered by commitments on transparency and non-discrimination, providing opportunities for EU companies to bid for government procurement projects in Singapore. Key areas where EU firms can now bid for government procurement projects in Singapore include computer-related services, telecommunications services, and land transport services.

The EU has also increased access for Singaporean companies, adding to its list of entities open for bids additional central-level government ministries, agencies, and other bodies. The EU has included more types of public services contracts covered by open tendering, such as railway services, computer services, and telecommunications services.

The Rules and Regulations of the European Union–Singapore Free Trade Agreement (EUSFTA) are designed to ensure that only products genuinely originating from either the EU or Singapore benefit from the preferential tariffs under the agreement.

Rules of origin play a crucial role in the EUSFTA, determining the 'economic nationality' of traded goods.

To qualify for preferential tariffs, products must meet specific requirements, which are outlined in the agreement.

The EUSFTA's rules of origin are based on the concept of 'originating goods', which means goods that have been sufficiently transformed or processed in either the EU or Singapore to give them a substantial character of those countries.

The European Union–Singapore Free Trade Agreement has introduced modern rules to protect and enforce intellectual property rights, strengthening the position of both EU and Singaporean businesses.

This comprehensive approach to IPR protection has contributed to the success of the agreement, benefiting businesses on both sides. The agreement includes a comprehensive chapter covering provisions on copyright, designs, enforcement, and geographical indications.

The EUSFTA has established a robust framework for intellectual property rights (IPR) protection, crucial for both Singapore and European competitiveness. This framework has fostered an environment conducive to innovation and creativity.

The agreement has introduced enhanced IP protection, offering a high level of protection for commercially important European Geographical Indications (GIs). 165 EU GIs have been successfully registered in Singapore, covering a wide range of products including wines, spirits, cheese, and meat products.

GIs accounted for the majority of EU food and beverage exports to Singapore, primarily spirits, wines, and cheeses. In 2022, EU agri-food exports to Singapore reached a record €2.2 billion, representing almost 7% of the EU’s total exports to Singapore.

The European Union–Singapore Free Trade Agreement (EUSFTA) has been a game-changer for businesses on both sides of the agreement. The journey from inception to implementation took several years, with key events unfolding as follows:

In 2009, Singapore and the EU launched negotiations for the EUSFTA, marking the beginning of a multi-year process.

Formal negotiations began in 2010, based on the ASEAN negotiating directives of 2007.

Goods and Services negotiations were concluded in 2012, followed by Investment protection negotiations in 2014.

The agreement was signed in October 2018, and the European Parliament approved it in February 2019.

The Council of the EU approved the EUSFTA on 8 November 2019, and it entered into force on 21 November 2019.

During the Brexit transition period (1 February 2020 – 31 December 2020), the United Kingdom was treated functionally as an EU Member State and remained a party to EU international agreements.

The EUSFTA has already started to yield benefits for businesses, including the elimination of tariffs on 84% of all Singapore products entering the EU within the first year of implementation (2019).

Here's a breakdown of the key events in the EUSFTA's timeline:

The EUSFTA has had a significant economic impact on both Singapore and the EU, fostering stronger trade relations and enhanced economic cooperation between the two dynamic markets.

In 2019, the EU-27 exported €1.9 billion of agri-food products to Singapore, more than double the figure from 10 years earlier.

With Singapore being the EU's 5th largest agri-food export market in Asia and 18th worldwide, this sector is poised for continued expansion under the EUSFTA.

The agreement has opened up Singapore's market for EU services exports, particularly in sectors such as transport and telecommunications, suggesting potential for continued growth in services trade.

Over 10,000 European companies have set up offices or regional hubs in Singapore, and we can anticipate increased investment flows and business collaborations in the coming years.

The EUSFTA's provisions for enhanced intellectual property rights protection and increased opportunities for participation in government procurement projects are likely to foster a conducive environment for sustained economic growth and partnership between the EU and Singapore.

The Committee on Trade In Goods plays a crucial role in monitoring the implementation of the agreement and promoting trade between the European Union and Singapore. It meets at the request of either party to consider any matter arising under this chapter.

The Committee's functions include monitoring the implementation of the agreement and annexes, promoting trade in goods, and addressing tariff and non-tariff measures. It may also refer matters to the Trade Committee for consideration.

Both parties agree to request information from each other as provided for in Article XVII of GATT 1994, which is incorporated into and made part of the agreement. This ensures transparency and cooperation in trade matters.

The Committee plays a crucial role in monitoring the implementation of this Chapter and Annexes 2-A, 2-B, and 2-C. It's responsible for ensuring that the Parties are following through on their commitments.

The Committee's functions also include promoting trade in goods between the Parties, which involves consultations on accelerating and broadening the scope of tariff elimination and non-tariff measures under this Agreement. These consultations can lead to amendments or expansions of Annexes 2-A, 2-B, and 2-C as needed.

The Committee may address tariff and non-tariff measures to trade in goods between the Parties, and if necessary, refer such matters to the Trade Committee for further consideration. This ensures that any issues are thoroughly examined and resolved.

The standstill provision is a critical aspect of this Agreement. It prohibits both Parties from increasing existing customs duties or introducing new customs duties on goods originating from the other Party.

Upon the entry into force of this Agreement, neither Party can raise a customs duty beyond the level established in its Schedule in Annex 2-A following a unilateral reduction. This means that any existing customs duties will remain unchanged.

The Parties affirm their existing rights and obligations under Article XVI of GATT 1994, including its Notes and Supplementary Provisions. These rights and obligations are incorporated into and made part of this Agreement.

Each Party can request information from the other Party as provided for in subparagraphs 4(c) and 4(d) of Article XVII of GATT 1994.

The EU-Singapore Trade Agreement is a significant milestone in the European Union-Singapore Free Trade Agreement. This bilateral trade agreement entered into force on November 21, 2019.

Under this agreement, Singapore will remove all remaining tariffs on EU origin products, while 80% of all imports from Singapore will enter the EU duty-free. The remaining EU tariffs will be removed within three or five years, depending on the product category.

Sectors such as electronics, pharmaceuticals, petrochemicals, and processed agricultural products will benefit from the immediate removal of tariffs. Tariffs on certain types of textiles and carpets will be dismantled over three years.

Tariffs on bikes, fruits, cereals, and sports footwear will be removed over the next five years. The EU-Singapore trade agreement also includes the concept of 'ASEAN cumulation,' which allows Singapore-based manufacturers to include components sourced from other ASEAN Member States as originating content.

Approved exporters authorized by the customs authorities of a Member State of the Union must provide proof of origin at export from the EU. C4T can help you evaluate the benefits of this agreement on your business activities and assist with the request of an authorisation to become an approved exporter.