The European Parliament last week endorsed the free trade deal between the EU and Singapore that includes investment protection regulations. The deal is hoped to become EU’s blueprint for further cooperation with Southeast Asia. Singapore is by far the bloc’s largest trade partner in the region, accounting for almost a third of EU-ASEAN trade in goods and services and about two-thirds of investment between the two regions. Over 10,000 European firms have their regional offices in Singapore.
The trade agreement will remove almost all tariffs between the two partners within five years, thus boosting trade in services including retail banking. It also protects unique European products such as Jerez wine or Nurnberger Bratwurst and opens up the Singaporean procurement market to EU firms. The trade agreement also includes provisions on labour rights and environmental protection. The deal is the first bilateral agreement between the EU and a member of the Association of Southeast Asian Nations (ASEAN) and as such can serve as a stepping-stone to future trade deals between both regions. This comes handy at a time when the EU can no longer rely on the United States as its leading trading partner.
MEP David Martin commented that the agreement demonstrated how committed the Parliament was to a rules-based trading system, adding that the EU “keeps fair and free trade alive.” Mr. Martin also noted that “the trade agreement will not only enhance the EU’s access to the Singapore market, but even more to the growing ASEAN region, while ensuring workers and the environment are well protected. The investment protection agreement incorporates the EU’s reformed approach, and will replace the existing Singapore-EU member state deals that include the toxic investor-state dispute settlement.”