In the long run, the collaborations between Singapore firms and firms in the European Union (EU) will be more seamless, courtesy of the landmark trade pact between Singapore and the EU that became binding in November 2019. The pact emphasises key foundations like standardising and simplifying customs procedures.
The EU-Singapore Free Trade Agreement (FTA) will strengthen the collaboration of the company, as noted by Singapore biotech firm Acumen Research Laboratories (Acumen). Acumen is involved in localising activities in the country as well as considering the possibility of licensing technologies from its Stuttgart-based counterpart.
According to the Director and Chief Scientist of Acumen, Dr Ong Siew Ha, there are benefits that come from the adoption of international regulatory guidelines and standards promoted by the EU-Singapore FTA.
With the adoption of harmonised and standardised regulations, the two jurisdictions can collaborate and transfer products like diagnostic products and medical devices – that are tightly regulated – in a better way.
The survey, which was carried out by the Singaporean-German Chamber of Industry and Commerce (SGC), was released on Tuesday (25 Feb). The survey respondents include Acumen amongst the 92 Singaporean and German firms.
The survey was carried out between September and November prior to the FTA being finalised on 21 November last year. The purpose of the survey was to collect feedback regarding the potential impact of the EU-Singapore trade pact on Singapore and German businesses as well as in what ways the agreement could bolster bilateral ties.
In 2018, the value of bilateral trade between Singapore and Germany was around €14.6 billion. Singapore is the largest trading partner in Southeast Asia for Germany, just as Germany is the largest trading partner in the EU for Singapore.
According to about 59 per cent and 46 per cent of firms surveyed, export performance would improve and trade barriers can be overcome with the EU-Singapore FTA in place.
In addition, the greatest barrier to trade between Singapore and Germany was the gap in regulations and divergence between the two countries, as answered by 31 per cent of respondents.
Additional barriers mentioned in the survey also include tariffs (26 per cent) as well as marking, labelling, and packaging requirements (27 per cent).
The EU-Singapore FTA has also brought benefits in the form of direct tariff savings to the food manufacturing sector by being a part of the EU-Singapore FTA, as highlighted by the Managing Director of Sin Hwa Dee Foodstuff Industries, Jocelyn Chng. Mr Chng noted that tariffs imposed on global exports of condiments and sauces could be as much as 20 per cent.
Once the EU-Singapore FTA was in place, there have been a reduction in soya sauce tariff rate from 7.7 per cent to 5.6 per cent.
According to the Executive Director of SGC, Tim Philippi, “The EU-Singapore FTA clearly caters to the needs of the German and Singaporean business community, and is therefore not only a political agreement, but one with concrete business implications.”