On Sunday, the European Union finalised and officially announced a free trade agreement with Singapore, in a move set to further stimulate economic ties between both partners. Singapore is the EU’s 13th largest trading partner and its first in the Association of Southeast Asian Nations, a political and economic organisation comprising ten countries located in Southeast Asia. It is also only the second Asian country, after South Korea in 2011, to enter such a privileged relationship with the union.
In a press conference on Sunday, EU Trade Commissioner Karel De Gucht declared that “we do not intend to stop here – I hope it will open the doors for FTAs with other countries in the ASEAN region.” The EU is keen to maintain its place as the world’s first trading bloc, even as China is becoming a dominant player in international trade. Since 2000, the USA’s share of world imports and exports has declined significantly, owing to China’s rapid expansion, yet Europe has retained its share.
This announcement received little attention from newspapers and financial blogs in Germany. It is, however, of more importance to the country than to any other member of the EU: Germany is Singapore’s largest trading partner in Europe, with imports and exports between both countries amounting to $21.5bn (€16.33bn) in 2011. Germany’s EU partners still accounted for 71% of its trade in 2011, but that share is declining, while trade with Asia has been expanding rapidly.
This agreement also helps to depict Singapore in a more positive light: the country last made the headlines in Germany in August, when the state of North-Rhine Westphalia discovered that German tax evaders had been shifting their assets to Singapore.
This latest trading partnership is expected to turn attention away from these matters and help Germany and the EU carve themselves a niche in the fast-growing Asian market.