SEA Companies To Reap Benefits Of EU-Singapore FTA

The European Union, Singapore Free Trade Agreement (EUSFTA), will bring commercial benefits for Southeast Asian manufacturing suppliers, a HSBC executive  as advised.

The EUSFTA will further amplify ASEAN’s burgeoning supply chains under a concept known as ‘ASEAN cumulation’. Essentially, this means that manufacturing inputs coming into Singapore, from other Southeast Asian member states for final assembly, will be considered as “domestic content”. In other words, these inputs will come under the city-state’s zero tariff regime with Europe.

This is a key element of the FTA given a significant amount of Singapore products, particularly in areas like electronics, precision manufacturing and pharmaceuticals, have parts produced in other Southeast Asian countries.

Ajay Sharma, APAC Head of Global Trade and Receivables Finance, HSBC commented on the wider opportunity for ASEAN: “With greater connectivity between the EU and ASEAN, we expect to see increased trade and investment flows in this major corridor. The unique concept of ASEAN cumulation enables not only Singapore but also ASEAN to reap the rewards of EUSFTA. As materials sourced within ASEAN could now be accepted as originating in Singapore, EUSFTA would further knit ASEAN together, harnessing its potential as a manufacturing hub and enhancing its overall competitiveness.”

Stuart Milne, CEO, HSBC Malaysia commented on the impact of the agreement on Malaysia: “This marks a significant step for Malaysian corporates that export to Singapore as it will enable them to unlock new opportunities to further sell their goods and services. Malaysia is well integrated into Singapore’s supply chain and continues to be a key trading partner of Singapore particularly in the areas of commodities, electrical and electronics and fast moving consumer goods.”

Manufacturing remains one of Singapore’s key sectors contributing more than 21 percent of annual Gross Domestic Product. From a Europe and Singapore trade corridor perspective, total trade in goods between Singapore and the EU have increased by 30 percent since 2006.

Trade flows are dominated by electronics, pharmaceuticals; chemicals and aviation. Between January to September of this year, Malaysia’s exports to Singapore hit RM99.83 billion, comprising 13.7 percent of Malaysia’s total exports.

How to take advantage of the FTA
1. Many globally traded goods already have tariffs removed, so the first step is to understand whether that is applicable to your product. All goods lines have a product code assigned by the World Trade Organisation. This could inform whether your product is tariff free beyond the EUSFTA.

2. Determine what documentation is required such as customs declarations and certificates of origin, and how to obtain these.

3. For components that are brought in from across Southeast Asia, there are automated solutions available in the market that can determine eligibility of components across suppliers or gaps in their compliance.

4. Seek expert advice from state-supported advisory services like business federations and chambers of commerce.


Please enter your comment!
Please enter your name here

Latest News

Bank Muamalat Approved 83% SME Payment Assistance Applications

With Covid-19 surge currently being experienced by the country seeing no sign of abating, many SME's who were already struggling during MCO...

Weekend Golf Getaway in Horizon Hills and Ponderosa

With Covid-19 looming, overseas travel is far and beyond anyone's wishes at the moment, but for frequent travelers keeping oneself locked up...

Coach Inspired By NYC Skyline

This holiday, Coach is updating its seasonal collection with the joyful release of its Coach 2020 Holiday Collection – the designs are...

Maxis Makes Top Management Changes After CTIO Departs

Maxis is seeing major changes in its top management, starting with the departure of its Chief Technology and Information Officer (CTIO), Morten...

Preparing for post-pandemic opportunities

Businesses in Malaysia must begin planning and preparing now to be able to leverage the opportunities that come with the eventual post-pandemic...

Must read

4 reasons why customer experience is the key to success

Vincent Tang, Regional Vice President, Asia, Epicor "Customer service" and "customer experience" are often used interchangeably. But there's a...

Deloitte report finds Malaysia among regional leaders in digital life adoption

An extensive survey conducted by Deloitte across age groups in eight countries in South and Southeast Asia showed that consumers aged between...

Malaysia needs to brand its startup ecosystem as one of world’s best, says KJ

Khairy Jamaluddin, Minister of Science, Technology and Innovation, said the country’s entrepreneurship ecosystem was on par with the world’s best, but Malaysia...

How today’s technology is key to industrial and manufacturing sector business continuity in a post-Covid-19 world

By  Dr. Ravi Gopinath, Chief Product Officer AVEVA , How the world does business was changing before the outbreak...