After almost two years of negotiations, Singapore and the EU have celebrated the conclusion of a bilateral FTA just before Christmas.
According to Dr. Yeo Lay Hwee, Senior Research Fellow at the Singapore Institute of International Affairs and Director of the EU Centre in Singapore, "This FTA is an important signal of the EU’s increased focus on Asia. It is the second one that the EU has concluded in Asia, after South Korea. As the EU embarks on structural reforms and austerity measures to address the challenges posed by the debt crisis, it also recognises the importance of a growth strategy that would require the EU to stay open and be actively engaged with the Asian economies."
"The conclusion of EU-Singapore FTA talks marks a new chapter in EU-Singapore relations and is likely to benefit both sides directly and indirectly," said Dr. Reuben Wong, a Council Member of the Singapore Institute of International Affairs and Associate Professor at the National University of Singapore.
The EUSFTA is the first bilateral FTA concluded by the EU with an ASEAN country. The EU previously attempted to reach an FTA deal with the ten ASEAN states as a group, but eventually opted to first reach separate FTAs with the ASEAN member countries.
"After the EU had suspended EU-ASEAN FTA negotiations and proceeded to negotiate with ASEAN states bilaterally, it was widely accepted that Singapore would be the easiest case to close," said Dr. Wong. "Singapore is not only the EU's largest trading partner in Southeast Asia and the second largest Asian foreign investor in the EU (after Japan), it is also a market with which the EU enjoys a comfortable trade surplus (of €8 billion)."
Dr. Wong added: "The FTA represents an opportunity for the EU to stimulate sluggish economic activity by increasing trade with an economically active Asia. The EUSFTA will be the EU's second FTA in Asia after South Korea. For Singapore, this FTA marks a jewel in its crown and should strengthen Singapore's position as an important trade hub in SE Asia - it was the last FTA which Singapore had yet to conclude among Singapore's most significant trading partners."
"The conclusion of the EU-Singapore FTA would further catalyse the EU’s foray into Southeast Asia," agreed Dr. Yeo. "The EU has started negotiations with Malaysia and Vietnam, and would be looking to launch negotiations with other dynamic ASEAN economies such as Indonesia, Philippines and Thailand."
However, Dr. Yeo warned: "It might be a little naïve to believe that the EU-Singapore FTA can serve as a blueprint for other bilateral FTAs between the EU and other ASEAN countries, because of differing economic structures and the specific characteristics of the EU trade with each of them differ."
Press Release: EU and Singapore agree on landmark trade deal [Europa, 16 Dec 2012]
Report: S'pore businesses set to benefit from EU-Singapore FTA [Channel NewsAsia, 16 Dec 2012]