ASEAN KEY DESTINATIONS
Singapore, EU strike landmark free trade deal
The Republic is the first country in Southeast Asia to seal an FTA with the EU, following negotiations that began in March 2010.
Trade and Industry Minister Lim Hng Kiang said: "There are numerous opportunities and benefits that EU and Singaporean companies can look forward to... Singapore is confident the (FTA) will further enhance our bilateral economic relations, and pave the way for a region-to-region trade deal between the EU and Asean."
The move is key to unlocking the gateway to the region and can be a catalyst for growth for EU exporters, said EU Trade Commissioner Karel De Gucht.
Although the EU has been hit by the sovereign debt crisis, it is still an economic power on the world stage. The region's troubled economies are expected to begin recovering by the middle of next year.
The agreement will see the EU eliminating tariffs on all imports from Singapore over a period of five years, said the Ministry of Trade and Industry.
Singapore exporters of electronics, pharmaceuticals, chemicals and processed food products in particular will benefit from the removal of the EU's tariffs. The Republic will grant immediate duty-free access for all imports from the EU.
The deal will also see both sides making extensive commitments guaranteeing access to each other's services markets.
The FTA will result in the removal of a number of non-tariff measures between the EU and Singapore, thus boosting access for exporters of pharmaceuticals and electronics. It will also widen access to government procurement opportunities.
The EU is Singapore's second-biggest trading partner, slightly behind Malaysia, while the Republic is the EU's fifth largest in Asia and the 13th most significant globally.
Bilateral trade hit S$106 billion (US$87 billion) last year, up 7 per cent from the figure in 2010.
Economists said the FTA is a significant milestone for Singapore and will benefit exporters and investors. DBS economist Irvin Seah said: "We already have FTAs with all our major trading partners except the EU. This is the final piece of our FTA network."
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