The 3-year long negotiation on a free-trade agreement between Singapore and the European Union (EU) has finally ended. Hence the efforts of the Euro region countries to increase commerce with Asian nations in a quest to revive economic growth have finally seen a positive development.
As the deal is confirmed now, the European Union is going to eliminate the tariffs on all the imports from Singapore in last 5 years. On the other hand, Singapore will also allow duty-free access for all the incoming shipments from the Euro region immediately. The decision was confirmed through a statement made by Singapore’s Ministry of Trade. This deal is also going to pave the way for both of the signatories to bid for the Government contracts in the other’s market. The Ministry statement also stated that the deal is going to guarantee access of Euro region countries and Singapore to each other’s markets. It is expected that this tariff removal will be benefiting Singapore exporters of pharmaceuticals, electronics, processed food products and chemicals most.
According to economists, for a better health of the global economy, it is important that the fastest and slowest growing regions in the world have trade ties between themselves. According to forecasts made by the International Monetary Fund, the Euro region’s economy is expected to contract by 0.4% in 2012, whereas, the Asian region will see a surge of 6.7%.
Incidentally, in 2009, EU stopped negotiations with the 10-member Association of Southeast Asian Nations and as a result, the European countries could not reach out to more than 600 million people. However, EU has recently started talks again with the individual countries such as Vietnam and Malaysia. Negotiations with India, one of the biggest powers of Southeast Asia also started in 2007, but were stalled at a later time.
According to the Trade Ministry of Singapore, the trade in goods between Singapore and EU was valued at $87 billion in last year. The overall trade figures have increased by 27% from that of 2006 (It is at 161 billion Euros currently) between the two regions and the foreign direct investment by the EU into the Southeast Asia region was $253 billion in last year. Incidentally, Singapore also has established free-trade agreements with different countries such as Japan, India, Australia, US and China.