DESPITE a slowdown in global trade, the European Union (EU) managed to surge ahead to became Singapore's largest trading partner early this year. Latest figures from trade agency International Enterprise Singapore show that the EU accounted for 12.3 per cent of the Republic's external trade, up from 11.2 per cent last year.

This puts the EU ahead of not only the previous No. 1 Malaysia but also China, the United States and other traditional Asean trade partners of Singapore between January and April this year. The Republic's trade with Malaysia accounted for 10.8 per cent, while trade with China and the US was just under 10 per cent during the same period.

Ambassador Holger Standertskjold, head of the delegation of the European Commission to Singapore, said that despite trying economic times, trade relations between the EU and Singapore have grown from strength to strength.

Mr Standertskjold was speaking to The Straits Times prior to the Fastest Growing 50 award presentation ceremony at the Ritz-Carlton Millenia Singapore on Friday.

'Trade generally has slowed down - we have an economic situation and we all know that,' he said. 'But trade between the EU and Singapore has slowed down less than the EU's trade with other markets...such as the US and Japan.'

According to Mr Standertskjold, feedback from the 3,000-strong European companies based here continues to indicate that they are staying put in Singapore despite the slowdown. 'The reason is that some of these companies have been here for up to 150 years...they believe in Singapore, they have invested in Singapore and that I think is the underlying reason why they will continue here,' he added.

Mr Standertskjold, who has been based here for the last three years, added that over the years, trade in goods between the EU and Singapore has also been expanding strongly. The value of EU-Singapore trade today amounted to a staggering $104.3 billion - a 60 per cent increase from $65 billion in 2003.

Official data shows that trade in goods had reached an average annual growth rate of about 9.5 per cent between 2003 and 2008 - higher than the growth in Singapore's trade with Malaysia, Japan and the US.

Last year, the EU exported 22 billion euros (S$45 billion) worth of goods here, making Singapore its 17th largest export recipient. The three main EU exports here are machinery and transport equipment - which accounts for about 57.3 per cent - chemicals and manufactured goods. The EU also imported about 16 billion euros worth of goods from Singapore, making it Singapore's second biggest client.

The latest EU-Singapore Trade and Investment report attributed the growth in trade to the Republic's role as a trading hub in South-east Asia. 'As Asean continues on the path of regional integration, the strategic position of Singapore is very attractive for trade partners like the EU,' said Mr Standertskjold.

Read the full story in Saturday's edition of The Straits Times

franchan@sph.com.sg