WHILE landing on the parameters for a region-to-region free trade agreement (FTA) is difficult, discussion has now shifted towards more specific areas of cooperation, said Deputy Prime Minister Heng Swee Keat in a speech on Wednesday (Apr 24).
He explained that the difficulty is due to differences in ambition and readiness between member states, and raised digitalisation, sustainability and supply chain resilience as examples of domains where the two sides can “make steady progress and put building blocks in place towards an eventual region-to-region FTA”.
Heng, who is also coordinating minister for economic policies,was speaking at the 10th anniversary gala dinner of the EU-Asean Business Council (EU-ABC). The council represents the interests of European businesses operating in Asean through engaging with policymakers to improve the investment and trade environment.
Heng highlighted that both Asean and the EU share the belief that “connectivity and integration are enablers of growth and development”, which has been a key factor underpinning the steadfast partnership between the two regions.
This is despite the fact that “the world today is more fragmented and fractious”, with global trade shrinking by 5 per cent or US$1.5 trillion in 2023, after a bounce back post-Covid, he said.
“Asean is now negotiating a Digital Economy Framework Agreement, and could benefit from the EU’s expertise in digitalisation and sustainability,” Heng noted, referring to talks on developing seamless digital trade and data flow between Asean member states that were launched on Dec 1, 2023, and expected to complete in 2025.
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He added that “another promising area for collaboration is cross-border energy trade”, and suggestedthe encouragement of “greater financial flows between the two regions to support the real economy”.
On how the two blocs can build on their longstanding partnership, Heng invited the EU “to tap Singapore as a testbed and pathfinder to achieve new breakthroughs in the region”.
Latest data from the Asean Statistical Database highlights that in 2022, approximately 91.5 per cent of European foreign direct investment into Asean was funnelled through Singapore, a testament to the Republic’s central position in bridging the two blocs.
The launch of negotiations for a legally binding EU-Singapore Digital Trade Agreement in July 2023 could “serve as a pathfinder for a legally binding arrangement between the EU and Asean in future”, Heng said.
He noted that the two sides have also signed the EU-Singapore Investment Protection Agreement (EUSIPA) in October 2018.
“This would provide enhanced investment protection for bilateral investments through modern provisions, and give legal certainty to our investors,” said Heng, adding that he looks forward to the entry into force of the EUSIPA once the ongoing ratification by all EU members is complete.
The dinner was in conjunction with the council’s inaugural business mission to Singapore, held on Tuesday. Over 200 guests, including business leaders and industry experts, attended the dinner at Park Royal Collection on Pickering.
