EUSFTA!

Written by Lim Jin Jie

Did you mean “eureka”?

Kind of, but not exactly. EUSFTA stands for the newly-signed European Union (EU)-Singapore Free Trade Agreement at the Asia-Europe Meeting summit at Brussels, Belgium last Friday (Oct 19). This served as “a signal of their commitment to open trade and its potential to benefit its people”, and will help in freeing up “access for each side to the other’s market”. This is a landmark deal which sees the EU signing an FTA for the first time with an ASEAN country.

Negotiations for the EUSFTA had begun in 2010, and aims to be ratified by 2019. Other than the EUSFTA, two other agreements were signed: the EU-Singapore Investment Protection Agreement and the EU-Singapore Partnership and Cooperation Agreement.

 

So what does this mean?

The European Union is Singapore’s largest foreign investor, and also its third largest trading partner. On the other hand, Singapore is the EU’s biggest trading partner in goods and services within Southeast Asia. This “ambitious” deal is set to boost trade between the two parties by 10% within 5 years, and is seen as a stepping stone towards a possible EU-ASEAN partnership.

More importantly, this deal came amidst the trade wars between the US and China. This gives a signal that like-minded nations should “come together and continue the momentum” to “create opportunities for our businesses and our people”.

Also, PM Lee commented in an interview with BBC that this is “an ambitious trade deal, a high-quality arrangement, and one which will fly the flag and encourage others, (he) hope(s), to do the same”. He also mentioned that Singapore is “prepared to transfer (the deal) over” and expedite the process when the UK is no longer part of the EU, using a “short form agreement” before working better arrangements for the long run.  

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