EU and Singapore are a Step Closer to Signing Free Trade Agreement
The European Commission has factored in the outcomes of the negotiations between the European Union and Singapore and has forwarded the same to the European Council for the changes to be ratified and incorporated in the Free Trade Agreement. The European Union – Singapore Free Trade Agreement, also known as EUSFTA, has been in the making for a while now. The exit of Britain pushed the European Union to make steadfast strides into new free trade agreements with what are already significant trading partners and investment destinations of the union comprising twenty eight member states. Subject to approval, the proposed agreement would be forwarded to the European Parliament for ratification.
The Ministry of Trade and Industry of Singapore has appreciated the progress and it has said that the ratification process being expedited proves the commitment of both the European Union and the republic to arrive at a consensus to have a free trade agreement that would be truly beneficial for both the regions. The trade pact is expected to be finalized before the present European Commission ends its term in 2019. The Council of Ministers is expected to approve the new agreement and then the ratification will be taken up by the EU Parliament.
It should be noted that the European Union does not have any such free trade agreement with any country in Southeast Asia. This is despite the member states and the union as a single entity having substantial presence in the region. Singapore is the gateway to the Pacific for the European Union. It serves as a trading and financial hub for innumerable operations. Thousands of companies with their headquarters in Europe use Singapore as the ASEAN hub to serve its clients and consumers across the Asia Pacific region. Presently, over ten thousand European companies have a base in the city state. The republic is also the most sought after investment destination for European companies. It is only befitting that a free trade agreement is in place to boost the cooperation between the two regions and to help businesses of both zones reap the rewards of collective expansions.
The negotiations had been ongoing till 2014 and it has taken a while for the outcomes to be incorporated after many correspondences between the two authorities. It appears so now that the agreement may come into effect by the end of 2018. The free trade agreement presently covers multiple verticals, catering to investors, companies and service providers. The agreement aims to promote public procurement in addition to the expected impact on trade. Singapore is presently the largest commercial partner of the European Union in Southeast Asia. It accounts for just under a third of all goods and services traded between ASEAN and European Union. Singapore also receives almost two third of the total investments between ASEAN and European Union. In 2017 alone, trade between Singapore and the European Union grew at 5.6% and is valued at $98.4 billion (Singaporean dollar). It is just over 10% of the total trade of Singapore.
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