Trade agreement with Singapore is an important signal of success
City state recognises EU standards - Last tariffs will be dismantled in the coming years - Agreements with further ASEAN states must follow
The free trade agreement between the EU and Singapore that came into force today is, according to the VDMA, an important signal of success in a world increasingly marked by protectionism. The non-tariff and technical barriers between Europe and the city-state will be reduced by this agreement, as EU standards and safety tests in core areas - such as vehicle parts and electronics - will also be recognised in Singapore. Even before this free trade agreement, almost all EU goods could be imported duty-free into Singapore. The remaining duties will now also be eliminated within three to five years, depending on the product category.
Moreover, this FTA is a building block in a number of bilateral trade agreements between the EU and the ASEAN countries. Negotiations have already been completed in Vietnam, and intensive negotiations are underway with Indonesia, Thailand and Malaysia. "In recent years, mechanical engineers from Germany have participated in the upswing in this region with rising exports.
"Countries such as Vietnam, Indonesia and Singapore are among the most dynamic economies in the world today and are becoming increasingly interesting both as sales markets and as investment locations".
Countries such as Vietnam, Indonesia and Singapore are among the most dynamic economies in the world today and are becoming increasingly interesting both as sales markets and as investment locations," says Ulrich Ackermann, Head of VDMA Foreign Trade. "Unfortunately, German machine builders are currently not active enough in the ASEAN region. There is still considerable potential to be tapped here."
In 2018, Germany exported machinery and equipment to Singapore for around 1.2 billion euros. With a recent import volume of 20 billion euros, Singapore is the largest mechanical engineering sales market in the ASEAN region.