Economic & 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 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 FTA 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 of 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 FTA, please see the recent analysis prepared by DG Trade here .
Trade in Goods
In recent years, the EU has become one of Singapore’s most important partners in merchandise trade: bilateral trade in goods grew by one-third between 2009 and 2013. According to the latest data, EU-Singapore trade in goods in 2013 amounted to over €46 billion, with the EU recording a trade surplus of €10.9 billion. These figures rank the EU as Singapore's third largest merchandise trading partner ahead of the USA and other ASEAN countries. Singapore is the EU's 15th largest trading partner in goods, accounting for over a quarter of all the EU's total merchandise trade with the ASEAN region. The most traded goods between EU and Singapore include machinery and transport equipment, chemicals, and miscellaneous manufactured articles.
Trade in Services
The EU is Singapore's largest trading partner in services, while Singapore is the EU's 7th largest trading partner in services. In 2012 (latest available data), EU-Singapore trade in services amounted to €28.3 billion, which represented more than half of the value of merchandise trade for the same year. The most traded services between the two partners are transport services, business and management services, and intellectual property (royalties).
Foreign Direct Investment (FDI)
At present, there are over 10,400 companies from the EU present in Singapore, operating across a range of economic sectors, the most important of which being manufacturing, financial and insurance services. Taken together, the EU's and Singapore's FDI stock in each other's economies totals almost €190 billion. In 2012, the EU was the most significant source of FDI in Singapore, accounting for €118.7 billion, or 26%, of the total FDI stock, far ahead of the USA (15%)and Japan (8%). Singapore is the EU's 5th largest external investor and registered an FDI stock of €68.6 billion in the EU at the end of 2012.
Trade and Investment Relations with ASEAN
In 2013, ASEAN accounted for around 5% of the EU's trade in goods and was the EU's 5th largest trading partner (after the US, China, Russia and Switzerland). EU merchandise exports to ASEAN reached €81.5 billion in 2013, while imports from ASEAN totalled €100.4 billion for that same year.
In 2012, total trade in goods and services between the two blocs exceeded €200 billion. The EU is also the largest source of FDI in ASEAN. The EU's FDI stock in the region amounted to €207.7 billion in 2012 (latest available data).
Singapore is the EU's largest economic partner in ASEAN. Singapore represents more than 25% of total EU-ASEAN trade in goods and over 50% of trade in services and holds close to 60% of the EU's FDI stock in ASEAN.