17th October 2014

EU-Singapore Free Trade Agreement talks concluded

Last week, the European Commission announced that the investment part of the EU-Singapore FTA has been finalized. The entire talks on the comprehensive free trade deal are thus completed, the non-investment parts being finished since 2013. The deal will now be formally signed and then will need to be approved by the European Parliament and by all the EU Member States. This comprehensive free trade agreement provides for removal of tariff and non-tariff barriers (such as different standards) in trade between the two as well as liberalization of services, investment and public procurement markets. Enterprises from one party will have easier access to the market of the other party, which should lead to increased economic activity, and thus growth and job creation. Singapore is an important trading partner for the EU and vice versa – EU enterprises are the second largest foreign investor in Singapore, and Singaporean enterprises are the largest Asian investors in the EU. The free trade agreement is seen as a first step – the EU plans to conclude similar deals with other South-East-Asian countries, such as Malaysia and Vietnam. However, the investor-to-state dispute settlement mechanism included in the deal is once again controversial, as in the CETA (FTA with Canada) and TTIP and opposition from certain Member States is expected. According to the Commission, though, the ISDS clauses are modern and well-worded and should not lead to controversies in the future. Some governments fear that ISDS clauses could be used as a weapon against legitimate policy interests of the Member States in the future.

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Members of the American Chamber of Commerce in the Czech Republic