Economic & Trade Relations
The European Union and Singapore share many common economic interests and their trade and investment relationship continues to grow in strength. Singapore is a key partner for the EU in the dynamic and fast-growing ASEAN region. As well as being a major partner in trade in goods, the EU continues to be Singapore’s largest trading partner in services and the most significant source of Foreign Direct Investment (FDI) for Singapore.
The EU-Singapore Free Trade Agreement (EUSFTA) represents one of the most ambitious agreements to date for both sides. The EUSFTA covers trade in goods and services as well as investments and addresses crucial non-tariff barriers to trade, such as technical standards and regulatory matters. Businesses in both the EU and Singapore will greatly benefit from this new trade environment.
The text of the Agreement was initialled on 20 September 2013 and is available here. The impact of this agreement is not only limited to bilateral relations: as the first in a series of FTAs the EU is negotiating with ASEAN countries, it will help foster greater regional integration in Southeast Asia and bring the two regions closer together. For a more comprehensive overview of the economic impact of the EUSFTA, please see the analysis prepared by DG Trade here .
Trade in Goods
The EU is one of Singapore’s most important partners in merchandise trade. Total EU-Singapore trade in goods grew by 7.7% in 2015 to reach €48.7 billion and the EU retained its position as Singapore's third most important trading partner, behind only China and Malaysia.
In 2015, total EU imports from Singapore reached €18.9 billion, while the EU exported €29.7 billion worth of goods to Singapore, resulting in a trade surplus of €10.8 billion in favour of the EU. The most traded goods between the EU and Singapore include machinery and transport equipment, chemical products and manufactures.
Trade in Services
The EU is Singapore's largest trading partner in services, while Singapore is the EU's 7th most important trading partner in services – ahead of Canada, Turkey and India. In 2014 (latest available data), EU-Singapore trade in services amounted to €36.1 billion, with the EU importing €15.7 billion worth of services from Singapore and exporting €20.4 billion. The most traded services between the two partners are business related services, transport services, financial services and telecommunications-related services.
Foreign Direct Investment (FDI)
The EU is the most significant investor in Singapore, representing almost 25% of total FDI stock in the city-state. In 2014, FDI stocks held by the EU in Singapore totalled €102.9 billion, or around 2% of total EU FDI held abroad, making Singapore the 10th most important destination for EU investments globally. Conversely, Singapore is the 9th largest investor in the EU, with an investment stock of almost €43.8 billion at the end of 2014. This makes Singapore the largest investor in the EU from ASEAN and the third largest investor in Asia, behind Japan and Hong Kong.
Trade and Investment Relations with ASEAN
ASEAN was the EU's third most important trading partner outside of Europe in 2015, with bilateral trade in goods reaching almost €201.4 billion – a leap of 12.1% from 2014. Taken as a single trading entity, ASEAN accounts for around 5.7% of the EU's total trade with the world.
In 2014, EU-ASEAN trade in services reached €67.4 billion, which represents a 6% increase compared to the previous year. The EU's total trade in services with the top four ASEAN countries (Singapore, Indonesia, Malaysia and Thailand ) reached €59 billion, accounting for close to 90% of the EU's bilateral trade in services with the region. Main services imported by the EU from these four ASEAN countries included transport, business and travel related services while main services exported by the EU to these countries included telecommunication, business and transport related services. With €36 billion worth of services traded bilaterally, Singapore accounted for 53.6 % of total trade in services between the EU and its ASEAN partners.
In 2014, the EU was ASEAN's largest investor with €184 billion in FDI stocks held in the region at year-end. If taken as a single entity, ASEAN was the5th most important location of EU FDI stock in the world, while ASEAN was the 9th most important source of FDI stock held in the EU with a total stock of €54.3 billion. EU FDI in ASEAN tends to be concentrated in Singapore, which alone accounts for close to 56% of EU FDI stocks in the region. Similarly, Singapore accounts for the lion's share (81%) of ASEAN FDI stocks held in the EU.
To access the EU-Singapore Trade and Investment Publication 2016, please click here [5 MB] .