21 Nov 2019
SINGAPORE: Free Trade Agreement with European Union Now in Effect
The EU-Singapore Free Trade Agreement (EUSFTA), came into effect on 21 November following its ratification by the European Council.
In terms of trade in goods, the FTA is said to provide a liberal and flexible rules of origin (ROO) regime relating to a range of key items, including clothing and textiles, electronics, machinery, automobiles, chemicals, pharmaceuticals and petrochemicals. It also abolishes all remaining customs duties on certain EU exports to Singapore, such as alcoholic beverages, while maintaining the current duty-free status on all non-specified EU products exported to Singapore.
Furthermore, the FTA will eliminate duty on 84% of Singaporean products entering the EU within the first year of its coming into force, with taxes payable on the remaining 16% phased out over the next three to five years. According to Singapore’s Ministry of Trade and Industry (MTI), the treaty is also “the first bilateral FTA that incorporates enhanced market access for Asian food products made in Singapore such as har gow (prawn dumplings) and sambal ikan bilis (spicy crispy anchovies).” This will facilitate duty-free access for such products to the EU provided they do not exceed a combined yearly quota of 1250 tonnes.
In terms of reducing non-tariff barriers, the EUSFTA provides for the removal of unnecessary technical barriers to trade (TBT) with the aim of creating a level playing field. The treaty’s provisions are said to extend beyond the existing WTO agreement on TBTs and are aimed at reducing costs for exporters from both parties. The related provisions include the simplification of marking and labelling regulations; the reduction of duplicate conformity testing for various electronic items; the recognition of international standards with regard to automotive parts; and a streamlining of the certification procedures for meat-producers and exporters.
In terms of the trade in services, the FTA is said to provide “enhanced market access for service providers, professionals and investors,” while also containing sector-specific rules on non-discriminatory treatment and transparency. In this regard, the FTA’s remit extends across businesses in the financial, professional, computer and information technology, research and development, business, telecommunication, environmental, tourism and trade related sectors.
The FTA also details transparency and non-discriminatory procedures with regards to government procurement, which extend beyond the comparable WTO agreement. Finally, in terms of intellectual property (IP) protection, the EUSFTA provides for the protection of, among other thing, geographical indications relating to the provenance of food and beverage products.