Free Trade Agreement between the EU and the Republic of Singapore – Analysis

16-03-2018

This study analyses provisions of the EU-Singapore Free Trade Agreement concluded in May 2015 ('EUSFTA'). It compares EUSFTA with other 'new-generation' free trade agreements, such as the EU-Republic of Korea and the EU-Canada Comprehensive Economic and Trade Agreement. Overall, EUSFTA adopts a WTO+ approach and as a result significantly liberalises trade between the EU and Singapore compared to the current trade relationship. The study finds that a number of tariff and non-tariff barriers to trade in goods and services that currently exist between the parties will be reduced or removed on EUSFTA's entry into force. EUSFTA, as with other 'new-generation' FTAs negotiated by the EU, adopts a comprehensive approach, and contains innovative provisions on investment, intellectual property rights, competition and public procurement. It also contains provisions which reflect growing concerns about the impact of global trade, such as those on trade and sustainable development. With regard to EUSFTA's potential impact on trade, the economic modelling estimates an increase of around 10 % in trade volumes and greater volumes of foreign direct investment between the EU and Singapore as a result of the agreement. It also concludes that EUSFTA should lead to small increases of the gross domestic products of the EU and Singapore (0.06 % and 0.35 %, respectively). The responses of a wide-range of EU and Singaporean stakeholder consultation reveal that, in general, EUSFTA is viewed positively and is considered a very ambitious agreement, which will offer new opportunities for trade and investment in the EU and Singapore. However, some concerns have been raised, especially by small and medium-sized enterprises. The implications of the result of the Opinion of the Court of Justice of the EU in case 2/15 of 2017, on whether the EU had exclusive competence to sign and conclude EUSFTA alone, is also analysed in detail. The study recommends, notably, monitoring closely that commitments taken under sustainable development provisions are implemented and used effectively in practice.

This study analyses provisions of the EU-Singapore Free Trade Agreement concluded in May 2015 ('EUSFTA'). It compares EUSFTA with other 'new-generation' free trade agreements, such as the EU-Republic of Korea and the EU-Canada Comprehensive Economic and Trade Agreement. Overall, EUSFTA adopts a WTO+ approach and as a result significantly liberalises trade between the EU and Singapore compared to the current trade relationship. The study finds that a number of tariff and non-tariff barriers to trade in goods and services that currently exist between the parties will be reduced or removed on EUSFTA's entry into force. EUSFTA, as with other 'new-generation' FTAs negotiated by the EU, adopts a comprehensive approach, and contains innovative provisions on investment, intellectual property rights, competition and public procurement. It also contains provisions which reflect growing concerns about the impact of global trade, such as those on trade and sustainable development. With regard to EUSFTA's potential impact on trade, the economic modelling estimates an increase of around 10 % in trade volumes and greater volumes of foreign direct investment between the EU and Singapore as a result of the agreement. It also concludes that EUSFTA should lead to small increases of the gross domestic products of the EU and Singapore (0.06 % and 0.35 %, respectively). The responses of a wide-range of EU and Singaporean stakeholder consultation reveal that, in general, EUSFTA is viewed positively and is considered a very ambitious agreement, which will offer new opportunities for trade and investment in the EU and Singapore. However, some concerns have been raised, especially by small and medium-sized enterprises. The implications of the result of the Opinion of the Court of Justice of the EU in case 2/15 of 2017, on whether the EU had exclusive competence to sign and conclude EUSFTA alone, is also analysed in detail. The study recommends, notably, monitoring closely that commitments taken under sustainable development provisions are implemented and used effectively in practice.

Külső szerző

Glyn CHAMBERS, Managing Economist Capital Economics, Melanie DEBONO, Economist Capital Economics, Costas FRANGESKIDES, Partner Holman Fenwick Wilan, Jody GALLAGHER, Trainee Solicitor Holman Fenwick Willan, Dr Peter HOLMES, Reader in Economics at Sussex University (project leader), Jeremy KELLY, Associate Holman Fenwick Willan, Eirini ROUSSOU, Senior Associate Holman Fenwick Willan, Cliff STEVENSON, Cliff Stevenson Consulting, Anthony WOOLICH, Partner Holman Fenwick Willan