You are here
Trade between EU and Singapore crosses 100b euros; further boost expected from FTA
TRADE in goods and services between Singapore and the EU has surpassed the symbolic 100 billion- euro (S$153.6 billion) mark, with the EU-Singapore free trade deals that were given the nod last week likely to further spur growth in the future.
In particular, trade in goods between the two parties reached a record of 58 billion euros last year, up 9 per cent compared to 2017, according to freshly released data from the European Commission on Thursday.
Eurostat findings also showed that EU exports of goods to Singapore grew by 11.7 per cent in 2018, while imports went up by 4.8 per cent.
Machinery & transport equipment, and chemical products dominated EU exports to Singapore in 2018, making up 46.7 per cent and 14.3 per cent respectively. The former grew by 16.8 per cent compared to a year ago.
The EU imported mainly organic chemicals and pharmaceutical products from Singapore, which accounted for 26.2 per cent and 13.6 per cent respectively of total Singapore exports to the EU.
EU ambassador to Singapore Barbara Plinkert noted that the recent EU-Singapore trade pacts would "further boost economic relations as they facilitate trade and create a transparent framework for investment".
Among them is the EU-Singapore free trade agreement (EUSFTA), which will remove nearly all customs duties between the two jurisdictions.
There are over 10,000 European companies in Singapore and the EU is Singapore's third largest trading partner.
Industry watchers expect local businesses to gain from the landmark deal, potentially providing a fillip to the Singapore economy.
Alan Turner, head of commercial banking, HSBC Singapore, described it as a "panacea" for the EU-Singapore trade corridor. "The economic benefits will be profound," he noted.
According to estimates, EU exports to Singapore are expected to grow 3.6 per cent, while Singapore's exports to the EU are likely to grow 10.4 per cent over a 10-year period.
Ho Meng Kit, CEO of the Singapore Business Federation, pointed out that the trade pact would go beyond the removal of tariffs. It also contains provisions relating to the elimination of non-tariff barriers, investor protection, sustainable development, competition, public procurement and intellectual property, he said.
In particular, Singapore manufacturers of electronics, pharmaceuticals, chemicals and processed food products are well-placed to benefit, added Mr Ho. "This will lower their costs and make them more competitive," he said.
And while the EU continues to grapple with the implications of Brexit, observers said that they are not likely to thwart the trade deal.
Mr Ho laid out several possible scenarios; in the first, if the UK and EU agree on a withdrawal accord, the UK will still be treated as an EU member state. Therefore, the EUSFTA will not be affected.
In the case of a "hard" Brexit, the UK will cease to be party to EU's international agreements when it leaves the EU on March 29. Singapore will have to seek a bilateral agreement with the UK.
"In this scenario, the impact is not just about the EUSFTA but how businesses will be impacted by the disruptions of a hard Brexit," he said.
The third case would be a postponement of Brexit, which means that the trade deal will remain status quo, he added.
Mr Turner, however, is optimistic about Singapore's prospects even if a "hard" Brexit plays out.
"Singapore is one of the most open and dynamic trade economies in the world. We have no doubt that the Republic will seek to find a solution to continue its ongoing trade with the UK," he said.