EU-SINGAPORE FREE TRADE AGREEMENT

EU-SINGAPORE FREE TRADE AGREEMENT

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(Update): **

10.

Mrs Mildred Tan asked the Minister for Trade and Industry (a) what is the current status of the EU-Singapore Free Trade Agreement (EUSFTA) given that the first round of talks have ended; (b) what benefits will Singaporeans accrue from the EUSFTA, in particular in the area of food security and sustainable development; and (c) whether the Minister will provide the aggregate amount of the total gains to Singapore from our FTAs so far.

Mr Lim Hng Kiang: Singapore and the European Union (EU) agreed to launch negotiations on an EU-Singapore FTA (EUSFTA) in December 2009. The first round was held in Singapore from 8th-12th March 2010. The discussions went well and covered a comprehensive range of

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issues such as trade in goods and services, Government procurement, regulatory and other technical barriers to trade, competition policy and sustainable development.

The launch of the EUSFTA negotiations marks a milestone in our relations with the EU. In 2009, the EU was Singapore's largest trading partner, accounting for 12% of our total trade. Singapore is the EU's 15th largest trading partner. The EU is also our largest foreign investor, with overall FDI stock from the EU accounting for close to 30% of Singapore's total FDI stock. Over 7,000 European companies have established operations in Singapore.

When concluded, the FTA will further strengthen these strong economic linkages. We expect companies from both Singapore and the EU to gain greater market access, which in turn will boost the welfare of consumers in the EU and Singapore.

As we are still in the early stages of negotiations, it is premature to quantify the scope and extent of benefits from the FTA. Singapore is open to discussing issues of mutual interest with the EU - such as food security and sustainable development – although we believe that the FTA should focus on areas of mutual trade and economic benefits.

The EUSFTA, when concluded, will add to Singapore's existing network of 18 FTAs in force. These FTAs, which cover two-thirds of Singapore's exports, have brought direct and tangible benefits to Singapore businesses. Last year, companies based in Singapore enjoyed more than S$700 million in tariff savings as a result of our FTAs. Furthermore, overseas investments by our companies have enjoyed increased protection, both through our FTAs and our investment guarantee agreements.

Our FTAs have also simplified regulatory barriers to trade. Such measures to facilitate trade help to lower business costs for our companies. For example, mutual recognition agreements for testing and certification of consumer electronics have helped our exporters avoid the need to duplicate testing procedures in other countries. This enables our companies to reap significant financial and time savings.

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