The free trade agreement between Singapore and the European Union (EU) is a "pathfinder" deal that could pave the way for similar pacts between the EU and other Asian nations, Trade and Industry Minister Chan Chun Sing said on Wednesday.
The EU-Singapore Free Trade Agreement (EUSFTA), which is pending ratification, would be the first bilateral deal between the EU and an Asean country.
Speaking to reporters after a day of meetings with EU trade officials in Brussels to discuss the EUSFTA, Mr Chan said his visit to the EU capital comes at a critical juncture because of rising protectionism around the world.
Markets have been rattled as a trade spat between the United States and China threatened to escalate into an all-out trade war, and Singapore's leaders have warned of the serious impact on the country if the conflict sparks a sustained plunge in business sentiment and consumer confidence, or a tightening of global liquidity.
"It is in our common interest to send a strong and powerful statement to the rest of the world that we have like-minded partners that continue to believe in a free, open and rules-based multilateral system," said Mr Chan.
The EUSFTA will allow Singapore and EU firms to enjoy greater market access and business opportunities in each other's markets. Once it comes into force, the deal will see tariffs on qualifying Singapore exports into the EU being progressively eliminated over five years.
It is in our common interest to send a strong and powerful statement to the rest of the world that we have like-minded partners that continue to believe in a free, open and rules-based multilateral system.
TRADE AND INDUSTRY MINISTER CHAN CHUN SING
It will also liberalise certain rules. For example, processed Asian food products made in Singapore, such as chicken and pork floss, canned luncheon meat and fish balls will be able to enter the EU tariff-free, within an annual quota.
The EU was Singapore's third-largest trading partner last year, with trade reaching $98.4 billion, slightly more than 10 per cent of Singapore's total trade.
"In the larger context, it's not just about a bilateral agreement between the EU and Singapore. There are quite a few larger strategic reasons for the EUSFTA to be ratified," Mr Chan said.
He noted that given global developments, it is also important for the EU to continue entrenching its position in South-east Asia's economic development.
"Many other Asean and Asian countries are looking at Singapore and the EU and saying that if Singapore and the EU can do it, then there's hope for the rest of the countries to have similar agreements with the EU to benefit their economies and people," he said.
"However, if this does not come about, then many South-east Asian and Asian countries might lose confidence and question the commitment of the EU to remain in this part of the region."
Among the officials Mr Chan met on Wednesday were Austrian Federal Minister for Digital and Economic Affairs Margarete Schrambock, who is also the chair of the Foreign Affairs Council (Trade), comprising the trade ministers of all 28 EU member states.
He also met Member of the European Parliament David Martin, who is also the EUSFTA rapporteur and has been in charge of drafting and presenting reports on the pact to the European Parliament.
Mr Chan said the meetings went well, with EU officials recognising that it is in their interest to remain engaged with Asia and conclude the FTA speedily before they are bogged down by domestic priorities.