BRUSSELS: Britain remains in the trade deal that the European Union is set to sign with Singapore this week but once its so-called post-Brexit transition period ends, it will have to leave the pact and start its own negotiations, said European Trade Commissioner Cecilia Malmstrom on Thursday (Oct 18).
Singapore will, in turn, fall back on the terms of the EU-Singapore Free Trade Agreement (EUSFTA), as well as arrangements agreed by Britain and the EU for the transition period, according to Communications and Information Minister S Iswaran.
AdvertisementBoth Ms Malmstrom and Mr Iswaran were speaking to the Singapore media after their meeting at the Berlaymont building, which houses the headquarters of the European Commission in Brussels.
When asked by Channel NewsAsia whether the soon-to-be-signed EUSFTA could be impacted by ongoing Brexit talks, Ms Malmstrom said while Britain is set to exit the 28-member bloc at the end of next March, “hopefully and very likely our agreement has entered into force by then so the UK will be part of that”.
She added that “intense” discussions going on between the EU and UK have not yielded a decision on the transition period – which starts after the UK’s formal exit in March and involves London accepting almost all EU rules without having a say in them – thus far.
“During that period, they will enjoy the benefits of our joint FTA but once that is over, they would have to leave that agreement and negotiate something on their own,” said the EU’s top trade official.
AdvertisementAdvertisement“But that depends very much on the decisions on the prime ministers and that is not a done deal yet.”
[h=3]READ: UK PM Theresa May says open to longer post-Brexit transition[/h]Following up on that, Mr Iswaran said Singapore will “be guided by what are the agreements and what are the transition arrangements that have to be made” in a post-Brexit scenario.
“Singapore will engage with other countries, including the UK, on that basis,” he added.
The landmark EUSFTA – which aims to remove import duties and taxes, improve protection and market access for service providers, investors and firms, among other things – will be signed on Friday by Prime Minister Lee Hsien Loong, European Council president Donald Tusk and European Commission president Jean-Claude Juncker on the sidelines of the 12th Asia-Europe Meeting Summit.
Together, they will also witness the signing of the EU-Singapore Investment Protection Agreement (EUSIPA) and the EU-Singapore Partnership and Cooperation Agreement (ESPCA).
In the case of the EUSIPA, which needs to be ratified by each of the 28 EU member states, Ms Malmstrom said how Singapore and the EU can cooperate to ensure an "expeditious" approval was on the agenda for her meeting with Mr Iswaran on Thursday.
Beyond that, discussions are also underway on how to promote the trade deal to small- and medium-sized enterprises (SMEs), which form the backbone of economies and yet often face larger difficulties than their bigger counterparts.
“We want to make sure that small companies on both sides get information on the possibilities to use and take advantage of the agreement,” said Ms Malmstrom.
Echoing that, Mr Iswaran said SMEs will stand to benefit given how such trade pacts can offer them clarity and scope to venture deeper into other economies.
There are more than 10,000 European companies operating in Singapore at the moment, while a sizable contingent of Singapore firms is also eyeing opportunities in Europe.
“In this case, between Europe and Singapore, we think there's much scope for SMEs,” he said.
[h=3]READ: PM Lee, German Chancellor Merkel welcome upcoming signing of EU-Singapore trade deal[/h]Apart from being an “important moment” between Singapore and the EU, Ms Malmstrom also described the EUSFTA as the European bloc’s “most ambitious agreement” in the Southeast Asia region.
Taken together with the EU’s final push for a trade deal with Vietnam and ongoing negotiations with Indonesia, these can be “stepping stones” towards the EU’s “long-term goal” of inking a wider trade pact with the Association of Southeast Asian Nations (ASEAN).
To be sure, this process will “by no means be a straightforward matter” given that it will involve a much larger grouping of countries, said Mr Iswaran.
However, individual agreements with Singapore and other ASEAN countries will give “a more specific form to the architecture”, and support will gain momentum once benefits become apparent, he added.
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