- Free trade agreement eliminates almost all tariffs within five years
- Stepping stone to trade agreements with other countries in the region
- Labour rights, environmental protection part of the agreement
Parliament endorsed the free trade and investment protection deals between EU and Singapore, serving as blueprint for further cooperation with Southeast Asia.
The free trade agreement, to which Parliament gave its consent by 425 votes, 186 votes against and 41 abstentions, will remove virtually all tariffs between the two parties within five years. It will allow for free trade in services, including in retail banking, it protects unique European products such as Jerez wine or Nürnberger Bratwurst and opens up the Singaporean procurement market to EU companies working, for example, in the rail sector. The agreement also includes strengthened labour rights and environmental protection, an element particularly important to Parliament.
Stepping stone to Asia
As the first bilateral trade agreement between the EU and a member of the Association of Southeast Asian Nations (ASEAN), the deal can serve as a stepping stone to further free trade deals between the two regions, at a time when the EU can no longer rely on the US as a trading partner, the resolution accompanying the decision states. It was adopted by 431 votes for, 189 against and 52 abstentions.
For more details on the elements of the trade deal, read here.
Investment court for dispute settlement
Separately, Parliament also agreed by 436 votes for, 203 against and 30 abstentions to an investment protection agreement providing a court system with independent judges to settle disputes between investors and state, and to a partnership and cooperation agreement, by 537 votes for, 85 against and 50 abstentions, which extends cooperation beyond the field of trade.
“Parliament has shown it is committed to a rules-based trading system: the EU keeps fair and free trade alive. The trade agreement will not only enhance the EU’s access to the Singapore market, but even more to the growing ASEAN region, while ensuring workers and the environment are well protected. The investment protection agreement incorporates the EU’s reformed approach, and will replace the existing Singapore-EU member state deals that include the toxic investor-state dispute settlement.” said David Martin (S&D, UK), the rapporteur on the agreements on the free trade and the investment protection deals.
Once Council concludes the trade agreement, it can enter into force on the first day of the second month following the conclusion. For the investment protection and the partnership and cooperation agreements to enter into force, the member states first need to ratify them.
Singapore is by far the EU’s largest partner in the region, accounting for almost a third of EU-ASEAN trade in goods and services, and roughly two-thirds of investment between the two regions. Over 10,000 European companies have their regional offices in Singapore.