NEW FREE TRADE AGREEMENT

2019 is a flourishing year for the negotiations and finalisation of free trade agreements, especially between the European Union and APAC countries.

What follows is a summary of what has been signed and what is still pending.

Free Trade agreement UE – Singapore

The EU-Singapore trade and investment agreements were signed on 19 October 2018.

Following the European Parliament’s consent to the agreements on 13 February 2019, ratification procedures are underway for their entry into force.

According to the European commission reports:

  • Singapore is the EU’s 14th largest trading partner in goods and the EU’s largest trading partner in the Association of Southeast Asian Nations (ASEAN). The ASEAN region is a dynamic market with some 640 million consumers and ranks as the eighth economy in the world; the ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam
  • Singapore is a major destination for European investments in Asia, and the third largest Asian investor in the EU (after Japan and Hong Kong).
  • In 2017 the existing bilateral foreign direct investment stock between the EU and Singapore was roughly €334 billion, having expanded rapidly over the past years.

Besides the trade negotiations with individual ASEAN Member States, the EU cooperates closely with the ASEAN region as a whole. Cooperation between the two regions is framed by a biannual ASEAN-EU Trade and Investment Work Program.

The EU-Singapore trade agreement will create new opportunities for EU businesses to export to Singapore and will help create jobs too. In fact, Singapore will now offer better access to its market to EU companies than it does to firms from elsewhere, especially in the transport, telecommunication and financial services sectors. Moreover, Singapore has agreed to make it easier for the EU to export a wide range of goods on its market such us electronics, textile and dairy products.

The agreement will also bring new rules on the custom procedures, simplifying and speeding up paperwork and physical checks, something that will help a lot the smaller companies.

Free trade agreement SAR Hong Kong

The ASEAN – Hong Kong, China Free Trade Agreement (AHKFTA) entered into force on 11th June 2019, for Hong Kong and five ASEAN Member States, namely, Laos, Myanmar, Singapore, Thailand and Vietnam.

Under the AHKFTA, Hong Kong and Singapore will grant tariff free access and will bind their customs duties at zero upon entry into force of the agreement. Brunei, Malaysia, the Philippines and Thailand will eliminate customs duties on 85% of products traded with Hong Kong within ten years and reduce another 10% of tariff lines within 14 years. Indonesia and Viet Nam will eliminate customs duties for 75% of their products within ten years, and reduce another 10% of tariff lines within 14 years. Meanwhile, Cambodia, Lao PDR and Myanmar will eliminate customs duties for 65% of their products within 15 years and reduce another 20% on tariff lines within 20 years.

Free trade agreement Vietnam

The European Union and Vietnam signed a Trade Agreement and an Investment Protection Agreement on 30th June 2019.

The agreements will be presented on the Vietnamese side to the National Assembly for ratification and on the EU side to the European Parliament for its consent, as well as to the respective national parliaments of EU Member States in the case of the Investment Protection Agreement.

The EU is Vietnam’s second-largest export market after the United States, with main exports including garment and footwear products. In 2018, Vietnam exported $42.5 billion (€37.32 billion) worth of goods and services to the EU, while the value of imports from the region reached $13.8 billion (€12.12 billion), according to official data.The largest sector of investment by the EU is industrial processing and manufacturing.

Free trade agreement Australia

Australia and the European Union (EU) launched negotiations for a free trade agreement (FTA) on 18 June 2018. As a bloc, the EU is Australia’s second largest trading partner, third largest export destination, and second largest services export market. The EU was Australia’s largest source of foreign investment in 2018.

The EU and Australia prepare for the next round of FTA negotiations in October

 

Nicolas Michaux, Managing Director Fidinam (Hong Kong) Limited

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