On October 1 in Yerevan the EAEU and Singapore signed an agreement on the establishment of free trade zone
Today the EAEU countries signed an agreement with Singapore on the establishment of free trade zone. The EAEU hopes that the removal of barriers in addition to the growth of trade turnover will increase the mutual inflows and allow the Union’s companies to enter markets of other ASEAN countries through Singapore.
On October 1 at the session of the Supreme Eurasian Economic Council in Yerevan, the agreement on free trade in goods and the framework agreement on comprehensive economic cooperation with Singapore was signed. The meeting was attended by the Prime Minister of Singapore Lee Hsien Loon. Chairman of the EEC Board Tigran Sargsyan explained “five bilateral agreements on trade in services and investments will also be signed later. This will create a comprehensive free trade area in the format “goods + services + investments”».
The FTA agreement covers duties and all areas of non-tariff regulation, including technical, sanitary, phytosanitary, etc.
The tariff obligations of the EAEU imply to provide free access for Singaporean goods, which make up 40% of the total commodity nomenclature as soon as agreement come into force – 87% – after the completion of all interim periods. Separate blocks of the agreement are devoted to the rules of carrying out arbitration and implementation of trade protection measures, the conditions of cooperation in the field of customs regulation, ecology, public procurement, electronic commerce, as well as the protection of intellectual property rights. A dispute resolution mechanism is also provided.
The EAEU and Singapore began consultations on the possibility of concluding an agreement in 2015 (for comparison, the preparation of the first one – FTA with Vietnam, which came into force in 2016, took six years). The Russia-Singapore Business Council was one of those structures which put forward and warmly supported the initiative to conclude an agreement on FTA with Singapore, firstly with the Russian Federation and then with the Eurasian Economic Union.
The parties believe that the agreement will allow companies from the Union countries through Singapore to enter other markets in the region (Singapore is a member of ASEAN, where there is duty-free trade zone as well as the TRANS-Pacific partnership, which in addition to the countries of South-East Asia includes, in particular, Japan, Canada and Mexico). Tigran Sargsyan said, “The effects that we have received from the implementation of the agreement with Vietnam — the growth of trade from $4.3 billion in 2016 to $5.9 billion in 2017 and $6.7 billion in 2018 — make cooperation with the EAEU very interesting for other ASEAN countries”.
According to the EEC, last year the volume of export of the EAEU to Singapore amounted to $3.29 billion, of which 84.7% was provided by Russia and 14.7% — by Kazakhstan. Oil products were exported for $2.27 billion and crude oil for $773 million. Imports from Singapore in 2018 amounted to $946 million, its structure was more diverse-from liquefied gas and petrochemicals to drugs, computers and cocoa beans, the largest position was “floating special purpose vehicles” – $266 million.
Singapore is a major logistic, financial and technological hub. The signing of a free trade agreement opens a new page in relations between Russia and Singapore, the EAEU and ASEAN. New opportunities are opening both for exporting companies and for importing companies from the Southeast Asia.
The Russia-Singapore Business Council is a part of consortia under the auspices of the Eurasian Economic Commission on the formation of digital transport corridors, creation of the Eurasian network of technology transfer, industrial cooperation and subcontracting. Its Executive structure is an official agent of the Russian Export Center in the region. On its initiative the was established Centre for promoting Russian high-tech companies and presenting investment projects in Singapore. All these tools will become more popular and will bring much more profit to Russian and Singaporean companies in connection with the signing of the agreement between the EAEU and Singapore on FTA.