Economic & Trade Relations
EU-Singapore Trade Relations
The European Union and Singapore share many common economic interests and their trade and investment relationship continues to go from strength to strength. Singapore is also a key partner of the EU in the dynamic and fast-growing ASEAN region. Despite the difficult economic conjuncture in Europe, 2012 has been a good year for EU-Singapore trade with bilateral merchandise trade growing by more than 12% and reaching a record €51.8 billion.
2012 marked a landmark year for the EU-Singapore trade relations with the conclusion of the talks for a free trade agreement after 2 and half years of negotiations. The agreement reached on December 16th 2012 between EU Trade Commissioner Karel De Gucht and Singapore's Minister of Trade and Industry Lim Hng Kiang is one of the most comprehensive the EU has ever negotiated and will create many new opportunities for companies from Europe and Singapore to do business together. The text of the Agreement has been initialled on 20 September 2013 and is publicly available here.
The EU is the world's largest economy and trading entity. It is also the world's leading investor and is a prime location for foreign direct investment (FDI). Furthermore, the EU Member States enjoy a single market: the free movement of goods, services, capital, and labour. The EU's trading partners, including Singapore, benefit greatly from such a large open market, in which a single set of trade rules, a single tariff, and a single set of administrative procedures apply, making it easier for companies to do business with the EU.
Trade in goods
During recent years, the EU has become one of Singapore’s most important merchandise trading partners. According to the latest data, trade in goods in 2012 amounted to €51.8 billion an increase of 12% from 2011 results. In 2012 the EU recorded a trade surplus of 8.8 billion Euros. The EU represents 9.4% of Singapore's exports and 12.3% of the City-State's imports. These figures rank the EU as Singapore's second largest trading partner behind Malaysia, but ahead of China, the USA and all the other ASEAN countries. Similarly, Singapore is the EU's 13th largest global trading partner in goods. The most traded goods include machinery and transport equipment, chemicals, and miscellaneous manufactured articles.
Trade in services
The EU is Singapore's largest trading partner in services. In 2010 (latest available data), EU-Singapore trade in services amounted to €22.6 billion, which represented more than half of the value of merchandise trade. Furthermore, Singapore is the EU's 7th largest trading partner in services worldwide. The most traded services between the two partners are transport services, business & management services, and royalties.
Foreign Direct Investment (FDI)
Over the years, the EU and Singapore have invested almost €190 billion in each other's economies. The EU FDI stock in Singapore has experienced very strong growth in the past decade. Inward FDI from the EU has been multiplied almost 4 fold between 2001 and 2010, increasing from €32.1 billion to €122.3 billion. The EU is the most significant source of FDI in Singapore, having 27.3% of total FDI stock of Singapore, far ahead of the USA, accounting for 10.6%, and Japan having 8.7% share. Furthermore, there are around 9000 EU companies present in Singapore spread in several economic sectors the most important being manufacturing, financial and insurance services. Similarly, Singapore is the EU's 5th largest external investor and accumulated over the years more than €67.3 billion FDI stock in the EU.
Trade and investment relations with ASEAN
In 2011, the EU was ASEAN's second trading partner and the EU accounted for about 11% of ASEAN's total external trade in goods. Total trade in goods between the EU and ASEAN has increased by 10.2% in 2012 and amounted to €181.3 billion. ASEAN as a whole represents the EU's 3rd largest trading partner outside Europe (after the US and China) with more than €206 billion of trade in goods and services in 2011 The EU is the largest source of foreign direct investment in ASEAN. The EU's FDI stock in the region amounted to €192.7 billion in 2010.
Singapore is the EU's largest economic partner in the ASEAN region: Singapore represents 28.5% of total EU-ASEAN trade in goods and 51% of trade in services and holds 63% of EU's foreign direct investment stocks in ASEAN.