The agreement has offered EU companies a door to Asia for more than three years. Does your company leverage its full free trade potential?
A recent trade agreement offers EU companies a door to Asia. Are you leverage the free trade potential?
The European Union-Singapore Free Trade Agreement (EUSFTA) was the first FTA concluded between the EU and an ASEAN country in 2019. Singapore and the EU launched negotiations of the EUSFTA in 2009. Using trade agreements to the fullest is an essential customs planning strategy.
Why leveraging Free Trade Agreements mattes to businesses
Customs planning is a necessity for any business involved in the international movement of goods. This includes leveraging FTAs to the fullest. Sure, it can be incredibly difficult for businesses to navigate, the measures governing international trade go far beyond basic import and export procedures and the payment of duties - and leverage all cost saving opportunities.
The Good and Services Agreement was concluded in 2012, and the Investment Protections Chapter in 2014. In early November 2019, the EU ratified the first bilateral trade agreement with a Southeast Asian country.
What's in it?
High-level features of the trade agreement include:
- Based on fair and rules-based trade.
- Aims to benefit workers, farmers, and companies of all sizes, in EU and Singapore.
- Includes strong clauses protecting human and labor rights and the environment.
Key benefits (EU)
- Singapore will remove all remaining tariffs on EU products.
- New opportunities for EU services' providers, among others in sectors such as telecommunications, environmental services, engineering, computing and maritime transport.
- Legal protection for 190 iconic European food and drink products, known as Geographical Indications.
- Removal of obstacles to trade besides tariffs in key sectors, for instance by recognising the EU's safety tests for cars and many electronic appliances or by accepting labels that EU companies use for textiles.
Key Benefits (Singapore)
84% of Singapore exports will enter the EU duty-free ENTRY INTO FORCE, including, for example, Asian Food Products, Electronics, Pharmaceuticals, Petrochemicals and Processed Agricultural Products.
Tariffs for the remaining products will be removed within 3 years, for example ins elected meat and seafood produce, fruits, textiles and consumer goods
Liberal and flexible rules for Singapore's exports: Key products originating in Singapore (either produced or processed), will be able to enter the EU tariff-free. With “ASEAN cumulation”, materials sourced from ASEAN Member States would be deemed as originating from Singapore when incorporated into certain final products, which can enable such products to qualify for preferential tariff treatment.
Improved market access for services: Singapore businesses will have improved market access to a wider range of services sectors in the EU.
Singapore companies can bid for more government procurement projects in the EU, for example for computer, telecommunication and railway services.
Singapore exporters will have lower operational cost with the reduction of duplicative testing and certification procedures in certain sectors.
The EUSFTA provides for 70 years of copyright protection. Singapore-based producers can collect broadcasting and public performance royalties for productions that are exported into the EU.
The EU and Singapore have also concluded an investment protection agreement, which can enter into force after it has been ratified by all EU Member States according to their own national procedures.
Rules of Origin under the EU Singapore FTA
The preferential origin of a product must be declared on the customs declaration to benefit from free duty. Usually, the origin of a product is, where it is wholly obtained –grown, born, extracted… or substantive transformation has taken place. Such rules exist also in the EU-Singapore FTA. Download the rules of origin provision:
Factsheets about the agreement
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