(Updates with comment from EU’s Schlegelmilch in final paragraph.)
Sept. 20 (Bloomberg) -- The European Union and Singapore approved the legal text of their planned free-trade agreement, keeping it on course to take effect around the end of 2014.
Trade representatives for both sides signed off on the final 1,000-page accord under which the EU will eliminate “virtually all” tariffs on imports from Singapore over five years and the Asian nation will end duties on the few remaining goods such as beer from the 28-nation bloc that aren’t already duty-free. EU duties on petrochemicals and pharmaceuticals from Singapore are among the levies to be scrapped.
The deal, struck last December after almost three years of talks, will also scale back technical barriers to trade and anchor deregulation of services markets including banking and insurance. The EU’s chief negotiator, Rupert Schlegelmilch, and his Singapore counterpart, Keith Tan, released the document today in Singapore, according to the European Commission, the bloc’s executive arm.
This is “one of the most comprehensive free-trade agreements ever negotiated,” the commission said today in a statement in Brussels. In Europe, the accord still needs the approval of the EU’s national governments and the European Parliament before it can take effect, a process that may take another 15 months or so.
The EU is sidestepping stalled World Trade Organization efforts to open markets by seeking commerce deals with individual countries such as the U.S., Canada and Japan or with groups of nations. The EU and Singapore had trade in goods of 52 billion euros ($70 billion) in 2012 and in services of 28 billion euros in 2011, making Singapore “by far” the bloc’s most important commercial partner in Southeast Asia, according to the commission.
With the EU also negotiating free-trade agreements with Malaysia, Vietnam and Thailand, the accord with Singapore “has the potential to lay the ground for the EU to engage with the region as a whole,” said the commission.
The EU has attempted discussions in the past with the Association of Southeast Asian Nations, or Asean, according to Schlegelmilch.
“We strongly feel that, ultimately, we would like to have an EU-Asean FTA,” he told reporters today in Singapore. “Perhaps it’s easier to do this in building blocks, but the political objective is very clear and remains. We want to have a region-to-region agreement.”
--With assistance from Ann Koh in Singapore. Editors: Andrew Clapham, Jones Hayden