Has Malaysia benefited from the expulsion of Singapore
Brussels, 18 April 2018
COM (2018) 196 final
Suggestion for one
on the conclusion of the free trade agreement between the European Union and the Republic of Singapore
1. CONTEXT OF THE PROPOSAL
• Reasons and objectives of the proposal
The dynamically growing economies of Southeast Asia with their over 600 million consumers and a rapidly rising middle class are key markets for exporters and investors from the European Union. With a total trade volume of EUR 208 billion in goods and EUR 77 billion in services (2016), the Association of Southeast Asian Nations (ASEAN) as a whole is the EU's third largest trading partner outside of Europe after the United States and China. At the same time, the EU is the largest foreign direct investor in ASEAN with a total of EUR 263 billion (2016) and this - with a total of EUR 116 billion (2016) - is in turn the second largest Asian direct investor in the EU.
Within ASEAN, Singapore is by far the EU's largest trading partner, accounting for a little less than a third of the goods and services trade between the EU and ASEAN and around two thirds of mutual investment. Over 10,000 EU companies are based in Singapore and use it as a hub to serve the entire Pacific region.
On April 23, 2007, the Council authorized the Commission to open negotiations on an Interregional Free Trade Agreement (FTA) with ASEAN member states. Although the aim was to negotiate an interregional free trade agreement, the authorization provided for the possibility of bilateral negotiations in the event that joint negotiations with a group of ASEAN member states could not be agreed. In view of the difficulties encountered, both sides recognized that the negotiations between the regions had reached an impasse and agreed to suspend them.
On December 22, 2009, the Council agreed on the principle that bilateral negotiations with individual ASEAN member states on the basis of the authorization and the 2007 negotiating directives should be started while maintaining the strategic goal of an interregional agreement. The Council also authorized the Commission to initiate bilateral negotiations on a free trade agreement with Singapore, which would represent a first step towards the intended early start of such negotiations with other interested ASEAN member states. Since the opening of negotiations with Singapore in March 2010, the EU has started bilateral FTA negotiations with other ASEAN member states, namely Malaysia (2010), Vietnam (2012), Thailand (2013), the Philippines (2015) and Indonesia (2016) .
By virtue of a competence newly conferred on the EU by the Lisbon Treaty, the Council authorized the Commission on September 12, 2011 to extend the ongoing negotiations with Singapore to include investment protection.
On the basis of the negotiating directives adopted by the Council in 2007 and expanded to include investment protection in 2011, the Commission negotiated an ambitious and comprehensive free trade agreement and an investment protection agreement with the Republic of Singapore in order to create new opportunities and legal certainty for trade and investment between the two partners. The wording of the agreements was published after the legal formality check and can be viewed at the following link:
The Commission makes the following proposals for Council decisions:
- Proposal for a Council decision to sign - on behalf of the European Union - the Free Trade Agreement between the European Union and the Republic of Singapore,
- Proposal for a Council decision on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore,
- Proposal for a Council decision to sign - on behalf of the European Union - the Investment Protection Agreement between the European Union and its Member States, on the one hand, and the Republic of Singapore, on the other hand,
–Proposal for a Council decision on the conclusion of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore, of the other part.
In parallel with these proposals, the Commission will present a proposal for a horizontal regulation on safeguard measures, which will include the FTA between the EU and Singapore, among other agreements.
Before the Agreement enters into force, the European Commission will review whether the protection of geographical indications is in accordance with the principles set out in the letter from the Singapore Minister for Trade and Industry dated January 21, 20131 and taking into account the outcome of the informal public consultation by the Singapore authorities in 2012 the EU achieved a satisfactory result in Singapore.
The attached proposal for a Council decision is the legal act for the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore.
• Consistency with the existing rules in this area
In parallel to the negotiations on the free trade and investment protection agreements, the European External Action Service was negotiating between the European Union and its member states, on the one hand, and the Republic of Singapore, on the other, on a Partnership and Cooperation Agreement (PCA), which was initialed in October 2013. Once in place, the PCA will provide the legal framework for further developing the already long and strong partnership between the EU and Singapore in a number of areas including political dialogue, trade, energy, transport, human rights, education, science and technology, justice, Deliver asylum and migration.
The long-standing trade and economic relations between the EU and Singapore have so far developed without a special legal framework. The free trade and investment protection agreements, which have now been negotiated, will represent specific agreements for the implementation of the PCA's trade and investment provisions and will form a central part of the overall bilateral relationship between the EU and Singapore.
The bilateral investment agreements between the Republic of Singapore and the EU member states listed in Annex 5 (agreements pursuant to Article 4.12) of the Investment Protection Agreement will be replaced and superseded by the Investment Protection Agreement between the EU and Singapore from the time it comes into force.
• Consistency with Union policies in other areas
The free trade and investment protection agreements between the EU and Singapore are fully coherent with the policies of the Union and do not require any changes to the rules, regulations or standards of the EU in any regulated area (e.g. technical regulations and product standards, sanitary or phytosanitary regulations, food regulations and safety, health and safety standards, regulations on GMOs, environmental protection, consumer protection, etc.).
In addition, in the free trade and investment protection agreements between the EU and Singapore, as in all trade and investment agreements negotiated by the Commission, public services are fully protected and it is ensured that the right of governments to regulate in the public interest, is fully respected by the agreements and constitutes a fundamental principle on which this agreement is based.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
In July 2015, the Commission asked the Court of Justice of the European Union for an opinion under Article 218 (11) TFEU on the question of whether the Union has the necessary competence to sign and conclude the agreement negotiated with Singapore alone, or whether the EU is involved -Member states is necessary or at least possible for certain topics.
In its Opinion 2/15 of 16 May 2017, the Court of Justice confirmed that the EU has sole competence in all areas covered by the agreement negotiated with Singapore; investments other than direct investments and the settlement of disputes between the investor and the state with the Member States as defendants, which in the opinion of the Court of Justice fall within the shared competence of the EU and the Member States, are excluded. The text on the settlement of disputes between the investor and the state was subsequently replaced by the provisions of the investment protection agreement on investment jurisdiction. The Court of Justice derived the exclusive competence of the EU from the scope of the common commercial policy under Article 207 (1) TFEU and from Article 3 (2) TFEU (due to the prejudice to existing common rules of secondary law).
In the light of the opinion of the Court of Justice and the extensive debate that followed with the Council and the European Parliament on the structure, the originally negotiated text was adapted to create two separate agreements, namely a free trade and an investment protection agreement.
According to Opinion 2/15, all areas covered by the FTA between the EU and Singapore fall within the competence of the EU and in particular under Article 91, Article 100 (2) and Article 207 TFEU. All substantive provisions on investment protection within the framework of the Investment Protection Agreement, insofar as they relate to foreign direct investments, fall under Article 207 TFEU.
The FTA between the EU and Singapore must be signed by the Union on the basis of a decision of the Council in accordance with Article 218 (5) TFEU and concluded on the basis of a decision adopted by the Council with the consent of the European Parliament in accordance with Article 218 (6) TFEU.
Article 218 (7) has been added as a legal basis as it is appropriate for the Council to authorize the Commission to approve, on behalf of the Union, certain amendments to the FTA which provide for approval of such amendments using the accelerated and / or simplified procedure. The Commission should therefore be empowered to approve amendments or corrections to Annexes 9-A to 9-I or Annexes 10-A and 10-B by the Trade Committee pursuant to Article 9.18 (amendment and correction of the scope) and Articles 10.17 (system for the protection of geographical indications) and 10.18 (modification of the list of geographical indications) of the FTA are to be adopted.
The investment protection agreement between the EU and Singapore is to be signed by the Union on the basis of a decision of the Council in accordance with Article 218 (5) TFEU and on the basis of one adopted by the Council with the consent of the European Parliament and after ratification by the Member States in accordance with their internal procedures Decision in accordance with Article 218 (6) TFEU.
• Subsidiarity (with non-exclusive competence)
As confirmed in Opinion 2/15, the FTA between the EU and Singapore submitted to the Council does not cover areas that do not fall under the exclusive competence of the EU.
With regard to the Investment Protection Agreement, the Court of Justice confirmed that, according to Article 207 TFEU, the EU has exclusive competence for all substantive provisions on investment protection insofar as the provisions relate to foreign direct investment. The Court of Justice also confirmed the exclusive competence of the EU over the mechanism for settling disputes between states in relation to investment protection. Finally, the Court found that investments other than direct investment and the settlement of disputes between the investor and the state (later replaced by the provisions of the Investment Protection Convention on investment jurisdiction), in which the Member States are the defendants, fall under the shared competence of the EU These elements cannot be consistently separated from the substantive provisions or the settlement of disputes between states and should therefore be included in agreements at EU level.
This proposal is in line with the Europe 2020 strategy and contributes to the achievement of the EU's trade and development goals.
• Choice of instrument
The proposal is in line with Article 218 TFEU, according to which decisions on international agreements are to be adopted by the Council. There is no other legal instrument that could achieve the objectives of this proposal.
3. RESULTS OF THE EX-POST ASSESSMENT, CONSULTATION OF STAKEHOLDERS AND IMPACT ASSESSMENT
• Ex post evaluation / fitness checks of existing legislation
After the negotiations with Singapore had largely been concluded, an internal team led by the chief economist of the Directorate-General for Trade carried out a study into the expected economic benefits of the agreement. The analysis suggests that EU exports to Singapore could increase by around EUR 1.4 billion over ten years and Singapore exports to the EU (including shipments of goods from the many subsidiaries of EU companies in Singapore back to the EU) increase by EUR 3.5 billion.
Due to the considerable size difference between the two economies and the relative openness of the Singapore economy, the two contracting parties will inevitably benefit from the agreement in different ways. The analysis predicts possible real GDP growth for the EU of around EUR 550 million within ten years, while the Singapore economy could expand by EUR 2.7 billion over the same period.
Given the difficulty of accurately quantifying the impact of removing non-tariff barriers, a key element of the agreement, these estimates of the potential economic impact should be considered conservative.
Because of Singapore's importance as a hub for trade in goods and services between the EU and Southeast Asia, profits from the agreements are also likely to increase further if the EU concludes agreements with other ASEAN member states.
In addition, estimates based on economic modeling cannot take into account the strategic value that the Free Trade and Investment Protection Agreements with Singapore have as crucial to the wider EU agenda in the ASEAN region and across Asia. After the Free Trade Agreement with Korea, the FTA with Singapore is the EU's second high-profile trade agreement with a key partner in Asia, while the Investment Protection Agreement with Singapore is the first such agreement with an Asian partner.
• Consultation with stakeholders
Before the start of bilateral negotiations with Singapore, the FTA between the EU and ASEAN was subjected to a trade-related sustainability assessment by an external contractor3 in order to analyze the possible economic, social and environmental effects of a closer economic partnership between the two regions.
As part of the preparation of the trade-related sustainability assessment, the contractor consulted internal and external experts and organized public consultations in Brussels and Bangkok as well as bilateral meetings and discussions with representatives of civil society in the EU and ASEAN. The trade-related sustainability assessment consultations provided a platform for a dialogue on trade policy towards Southeast Asia with the involvement of key stakeholders and civil society.
Both the sustainability assessment report and the consultations during its preparation provided the Commission with information that has since proven to be of great value in all bilateral negotiations with individual ASEAN member states on trade and investment.
In addition, prior to entering into bilateral negotiations with Singapore, the Commission conducted a public consultation through a questionnaire to collect information from stakeholders which later helped it prioritize and make decisions throughout the negotiation process. A summary of the results of the consultation has been published. 4
Before and during the negotiations, the EU Member States were also regularly informed and consulted orally and in writing on the various aspects of the negotiations with the help of the Council's Trade Policy Committee. The European Parliament was also regularly informed and consulted with the help of its Committee on International Trade (INTA) and, in particular, its support group for the FTA with Singapore.The text gradually emerging from the negotiations was forwarded to both institutions throughout the procedure.
• Collection and use of expert knowledge
The external contractor “Ecorys” subjected the FTA between the EU and ASEAN to a trade-related sustainability assessment.
• Impact assessment
The trade-related sustainability assessment, carried out by an external contractor and completed in 2009, concluded that an ambitious FTA between the EU and ASEAN would have significant positive effects (on GDP, income, trade and employment) for both the EU and Singapore. The impact on national income was estimated at EUR 13 billion for the EU and EUR 7.5 billion for Singapore. These numbers may be underestimated as they are based on the 2007 trade structure and trade has grown significantly since then (+ 32%).
• Regulatory efficiency and simplification
The free trade and investment protection agreements between the EU and Singapore are not subject to the REFIT procedures. Nonetheless, they contain a number of provisions aimed at simplifying trade and investment procedures and reducing export and investment costs so that more small businesses can do business in both markets. The expected results include: Reduction of the burden of technical regulations, compliance requirements, customs procedures and rules of origin, protection of intellectual property rights and lower costs for procedures under the investment jurisdiction if the applicants are SMEs.
• Fundamental rights
The proposed agreement does not affect the protection of fundamental rights in the Union.
4. BUDGETARY IMPLICATION
The FTA between the EU and Singapore will have an impact on the revenue side of the EU budget. It is estimated that once the agreement is fully implemented, the loss of duties could amount to EUR 248.8 million. The estimate is based on the forecast of average imports in 2025, in the absence of an agreement, and reflects the annual loss of revenue from the removal of EU tariffs on imports from Singapore.
The investment protection agreement between the EU and Singapore is likely to have an impact on the expenditure side of the EU budget. This agreement will be the second agreement of the EU (after the comprehensive economic and trade agreement between the EU and Canada) to include the investment jurisdiction for the settlement of disputes between investors and states. From 2018 (subject to the entry into force of the Agreement), an additional annual expenditure of EUR 200,000 is estimated to fund the permanent structure consisting of a Court of First Instance and an Appeals Court. At the same time, the agreement provides for the use of administrative resources under budget line XX 01 01 01 (expenditure on officials and temporary agents of the Commission), as it is expected that a full-time AD official (i.e. a FTE) will only be entrusted with tasks related to this agreement becomes. This is stated in the financial statement. The conditions stated therein apply.
5. FURTHER INFORMATION
• Implementation plans as well as monitoring, evaluation and reporting modalities
The free trade and investment protection agreements between the EU and Singapore contain institutional provisions that define a structure of executive bodies that continuously monitor the implementation, functioning and effects of the agreement. Since the agreements are part of the overall bilateral relations between the EU and Singapore regulated by the PCA, the structures mentioned together with the PCA form a common institutional framework.
The institutional chapter of the FTA establishes a trade committee whose main role is to oversee and facilitate the implementation and application of the agreement. The trade committee is composed of representatives from the Union and Singapore, who meet every two years or at the request of either side. The committee is responsible for overseeing the work of all committees set up under the agreement on specific issues (committees on trade in goods, sanitary and phytosanitary measures, tariffs and trade in services, investments and public procurement).
The Trade Committee is also responsible for communicating with all stakeholders, including the private sector and civil society, in relation to the functioning and implementation of the Agreement. In the agreement, both sides recognize the importance of transparency and openness and undertake to take into account the opinions of representatives of the public so that they can rely on a wide range of different points of view in the implementation of this agreement.
The institutional chapter of the investment protection agreement sets up a committee whose main task is to oversee and facilitate the implementation and application of the agreement. Among other functions, the Committee may, provided that both sides comply with their respective legal requirements and complete their proceedings, decide on the appointment of the members of the court in the framework of the investment court system, determine their basic monthly compensation and other allowances and adopt binding interpretations of the agreement.
As highlighted in the Trade for All Communication, the Commission is devoting increasing resources to the effective implementation and enforcement of trade and investment agreements. In 2017 the Commission published the first annual report on the implementation of FTAs. The main aim of the report is to give an objective picture of the implementation of the FTAs concluded by the EU, highlighting the progress made and the shortcomings to be addressed. The report is intended to serve as the basis for an open and committed debate with the Member States, the European Parliament and civil society on the functioning of FTAs and their implementation. As it is published annually, the report will allow for regular monitoring of developments, including a record of what was done to address urgent issues identified. The FTA between the EU and Singapore will be taken into account in the report as soon as it comes into force.
• Explanatory documents (for guidelines)
• Detailed explanation of individual provisions of the proposal
The FTA between the EU and Singapore creates the conditions for economic operators from the EU to be able to take full advantage of the opportunities that Singapore offers as an economic and transport hub in Southeast Asia.
In the negotiations on this agreement, the Commission pursued two main objectives: firstly, to achieve the most favorable conditions for EU actors to access the Singapore market, and secondly, to create a valuable reference point for the rest of the EU's negotiations in the region.
Both lines have been fully achieved: the agreement goes beyond the existing WTO obligations in many areas, such as services, procurement, non-tariff barriers and the protection of intellectual property including geographical indications. In all of these areas, Singapore also agreed to new commitments that far exceed what Singapore has accepted so far, including in its FTA with the United States.
The agreement meets the criteria of Article XXIV of the GATT (elimination of customs duties and other restrictive trade regulations for almost all trade in goods between the contracting parties) and Article V of the GATS, which provides for a similar test for services.
In line with the objectives set by the negotiating directives, the Commission achieved:
1) the comprehensive liberalization of the markets for services and investments, including overarching regulations on licensing and mutual recognition of qualifications as well as sector-specific regulations to ensure fair competition for EU companies;
2) new opportunities for bidders from the EU in tenders, especially in the utility market, where there are many leading suppliers from the EU;
3) the elimination of technical and regulatory barriers to trade in goods, such as double testing requirements, in particular by promoting the use of technical and regulatory standards familiar in the EU for motor vehicles, electronics, pharmaceuticals and medical devices as well as for environmentally friendly technologies;
4) a more trade-facilitating regime for the authorization of European meat exports to Singapore based on international standards;
5) Singapore's obligation not to increase its tariffs (most of which are currently not applied on a voluntary basis) on imports from the EU and cheaper access for European businesses and consumers to Singapore-made products;
6) a high level of protection of intellectual property rights, including with regard to the enforcement of these rights, for example at the border;
7) a TRIPS plus level of EU GI protection after registration in Singapore, once Singapore has set up a GI register (Singapore committed to do so after the European Parliament approved the FTA);
8) a comprehensive chapter on trade and sustainable development to ensure that trade supports environmental protection and social development and promotes the sustainable management of forests and fish stocks. This chapter also describes how the social partners and civil society are involved in the implementation and monitoring of these provisions;
9) a mechanism for the rapid resolution of disputes either through an arbitration panel or through a mediator and
10) a comprehensive novel chapter promoting new opportunities in the "green growth sector" in line with the Europe 2020 strategy.
The investment protection agreement between the EU and Singapore will ensure a high level of investment protection while safeguarding the right of the EU and Singapore to regulate and pursue legitimate public interest goals such as the protection of public health and safety and the environment.
The agreement contains all innovations of the EU's new approach to investment protection, including the associated enforcement mechanisms, which are not contained in the 12 existing bilateral investment agreements between Singapore and EU member states. It is a very important feature of the Investment Protection Agreement that it replaces and thus improves upon the 12 existing bilateral investment agreements.
In line with the objectives set in the negotiating directives, the Commission ensured that EU investors and their investments in Singapore are treated fairly and fairly and that they are not discriminated against compared to investments from Singapore in a comparable situation. At the same time, the investment protection agreement protects investors from the EU and their investments in Singapore from expropriation, unless this is done in the public interest, in accordance with the rule of law, without discrimination and against payment of prompt, appropriate and effective compensation that reflects the fair market value of the expropriated investment corresponds to.
Also in line with the negotiating directives, the investment protection agreement negotiated by the Commission will offer investors the option of a modern, reformed mechanism for resolving investment disputes. This system ensures that the regulations on investment protection are complied with and is intended to strike a balance between the transparent protection of investors and the safeguarding of the right of a state to regulate the pursuit of public interest goals. The agreement establishes a permanent international, fully independent dispute settlement system, consisting of a permanent court of first instance and an appeals court, within the framework of which dispute settlement procedures are transparent and impartial.
The Commission recognizes that in the eventual exercise of shared competence on these issues, a balance needs to be struck between driving the reformed EU investment policy forward and the sensitivities of Member States. The Commission has therefore not submitted a proposal for the provisional application of the Investment Protection Agreement. However, it stands ready to come up with such a proposal if Member States so wish.
Suggestion for one
on the conclusion of the free trade agreement between the European Union and the Republic of Singapore
THE COUNCIL OF THE EUROPEAN UNION,
based on the Treaty on the Functioning of the European Union, in particular Article 91, Article 100 paragraph 2 and Article 207 in conjunction with Article 218 paragraph 6 letter a number v and Article 218 paragraph 7,
on the proposal of the European Commission,
after approval of the European Parliament,
(1) In accordance with Council Decision [XX], the Free Trade Agreement between the European Union and the Republic of Singapore (hereinafter "Singapore"), hereinafter "the Agreement", was signed on [XX.XX.2018].
(2) Pursuant to Article 218 (7) TFEU, it is appropriate that the Council empower the Commission to approve, on behalf of the Union, the position to be taken in the Trade Committee on certain amendments to be adopted under a simplified procedure. The Commission should be empowered to approve amendments to Annexes 9-A to 9-I or Annexes 10-A and 10-B of the Agreement made by the Trade Committee under Article 9.18 (amendment and correction of the scope) and Article 10.17 (System for the protection of geographical indications) and 10.18 (modification of the list of geographical indications) are to be adopted.
(3) The Agreement should be approved on behalf of the European Union.
(4) In accordance with Article 16.16 (No direct effect) of the Agreement, it should not create any rights or obligations for any person other than those created between the Parties under international law.
HAS ADOPTED THIS DECISION:
The free trade agreement between the European Union and the Republic of Singapore is concluded.
For the purposes of Article 9.18 (amendment and correction of the scope), the amendments or corrections to Annexes 9-A to 9-I of the Agreement are approved by the Commission on behalf of the Union.
For the purposes of Articles 10.17 (System for the protection of geographical indications) and 10.18 (Modification of the list of geographical indications) of the Agreement, the amendments to Annexes 10-A and 10-B of the Agreement are approved by the Commission on behalf of the Union.
The President of the Council shall appoint the person empowered to make the notification under Article 16.13 (2) of the Agreement on behalf of the European Union, with whom the European Union expresses its consent to the contractual obligations of the Agreement. 5
This resolution is valid from the day of its acceptance.
Done at Brussels on [...]
On behalf of the Council
- (1) http://trade.ec.europa.eu/doclib/docs/2013/september/tradoc_151779.pdf
- (2) See the clarification in the judgment of the Court of Justice of the European Union in case C-600/14, Germany v Council (judgment of 5 December 2017), paragraph 69.
- (3) http://trade.ec.europa.eu/doclib/html/145989.htm
- (4) http://trade.ec.europa.eu/doclib/html/153666.htm
- (5) The date of entry into force of the Agreement will be published in the Official Journal of the European Union by the General Secretariat of the Council.
Brussels, 18 April 2018
COM (2018) 196 final
Proposal for a Council decision
on the conclusion of the free trade agreement between the European Union and the Republic of Singapore
between the European Union
and the Republic of Singapore
The European Union, hereinafter "Union",
the Republic of Singapore, hereinafter "Singapore",
Recognizing their longstanding, strong partnership based on the common principles and values reflected in the Partnership and Cooperation Agreement and their significant economic, trade and investment relationships,
Desiring to further deepen their relationship within the framework of and in accordance with their general relationship, and convinced that this Agreement will create a new climate conducive to the development of trade and investment between the Parties,
Acknowledging that this Agreement complements and supports efforts towards regional economic integration,
Determined to intensify its economic, trade and investment relations in accordance with the goal of economically, socially and ecologically sustainable development and to promote trade and investment activities in such a way that attention is paid to a high level of environmental protection and occupational safety and relevant internationally recognized standards and agreements to which they are a party are taken into account,
Desiring to raise living standards, promote economic growth and stability, create new employment opportunities and promote the common good, and, in view of that aim, reaffirming their commitment to promote the liberalization of trade and investment,
Convinced that this agreement will create an enlarged and secure market for goods and services and thus improve the competitiveness of your companies on the world market,
Reaffirming the right of each Party to take and enforce measures necessary to pursue legitimate political objectives, for example in the areas of social, environmental, safety, public health and consumer safety, and the promotion and protection of cultural diversity,
Reaffirming their commitment to the Charter of the United Nations signed in San Francisco on June 26, 1945 and in compliance with the principles of the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on December 10, 1948,
Recognizing that transparency in international trade is important and benefits all parties involved,
Endeavoring to establish clear and mutually beneficial rules for trade and investment and to reduce or remove barriers to mutual trade and investment activity,
Determined to contribute to the harmonious development and expansion of international trade by removing trade barriers through this Agreement and to avoid the build-up of new trade or investment barriers between the Parties, which could reduce the benefits of this Agreement,
Based on their respective rights and obligations under the WTO Agreement and under other multilateral, regional and bilateral agreements and arrangements to which they are a party,
have agreed as follows:
Objectives and general definitions
Establishment of a free trade area
The parties to this Agreement shall establish a free trade area in accordance with Article XXIV GATT 1994 and Article V GATS.
The aim of this agreement is to liberalize and facilitate trade and investment between the contracting parties in accordance with this agreement.
Generally applicable definitions
Unless otherwise specified, for the purposes of this Agreement the term means
"Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A of the WTO Agreement;
"Government Procurement Agreement" means the Government Procurement Agreement in Annex 4 of the WTO Agreement;
“Pre-Shipment Inspection Agreement” means the Pre-Shipment Inspection Agreement in Annex 1A of the WTO Agreement;
"Anti-Dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A of the WTO Agreement;
“Customs Valuation Agreement” means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A of the WTO Agreement;
“Day” a calendar day;
"DSU" the agreement on rules and procedures for the settlement of disputes in Annex 2 of the WTO Agreement;
"GATS" means the General Agreement on Trade in Services in Annex 1B of the WTO Agreement;
"GATT 1994" the General Agreement on Tariffs and Trade 1994 in Annex 1A of the WTO Agreement;
"Harmonized System" means the Harmonized System for the description and coding of goods, including any related notes and amendments (hereinafter "HS");
"IMF" the International Monetary Fund,
“Import Licensing Agreement” means the Agreement on Import Licensing Procedures in Annex 1A of the WTO Agreement;
“Measure” means a law, other regulation, procedure, requirement or behavior;
“Natural person of a contracting party” a person who is a national of Singapore or a member state of the Union according to the respective internal legislation;
"Partnership and Cooperation Agreement" means the partnership and cooperation agreement signed on [...] between the European Union and its Member States, on the one hand, and the Republic of Singapore, on the other hand;
“Person” a natural or legal person;
"Safeguards Agreement" means the Agreement on Safeguards in Annex 1A of the WTO Agreement;
"Subsidies Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A of the WTO Agreement;
"SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A of the WTO Agreement;
"TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1A of the WTO Agreement;
"TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C of the WTO Agreement;
“WIPO” the World Intellectual Property Organization;
“WTO Agreement” means the Marrakech Agreement of April 15, 1994 establishing the World Trade Organization;
"WTO" the World Trade Organization.
National treatment and market access for goods
During a transitional period beginning with the entry into force of this Agreement, the Contracting Parties will gradually liberalize trade in goods in accordance with this Agreement and in accordance with Article XXIV of GATT 1994.
This chapter applies to trade in goods between the contracting parties.
Each contracting party grants national treatment to the goods of the other contracting party in accordance with Article III of GATT 1994 and the relevant notes and supplementary provisions. To this end, the obligations in Article III of GATT 1994 and the relevant comments and supplementary provisions are adopted as an integral part of this Agreement.
For the purposes of this chapter, customs are duties and charges of any kind imposed on or in connection with the importation or exportation of goods, including additional duties and surcharges in any form imposed on or in connection with such importation or exportation.
“Customs”, on the other hand, does not include any
a) internal taxes equivalent to charges levied in accordance with Article 2.3 (National Treatment),
b) duties imposed in accordance with Chapter Three (Trade Defense Measures),
c) Customs duties levied in accordance with Articles VI, XVI and XIX GATT 1994, the Anti-Dumping Agreement, the Subsidy Agreement, Article 5 of the Agreement on Agriculture or the DSU,
d) fees or other charges imposed in accordance with Article 2.10 (Fees and formalities relating to import and export).
Classification of the goods
For the classification of the goods in trade between the contracting parties, the customs tariff nomenclature of the respective contracting party applies in accordance with the HS and its amendments.
Reduction and / or elimination of tariffs
Reduction and / or elimination of import duties
1. Each Contracting Party will dismantle and / or eliminate its customs duties on imported goods originating in the other Contracting Party in accordance with the step-by-step plans in Appendix 2-A. For the purposes of this chapter, the term “goods originating in” or “goods of origin” means goods which are goods of origin within the meaning of the rules of origin of Protocol No. 1.
2. As the basic import duty rate, from which the gradual tariff reduction according to paragraph 1 has to take place, the rate specified in the respective gradual plan in Appendix 2-A applies.
3. If, after the entry into force of this Agreement, a Contracting Party reduces the most-favored-nation tariff rate applied by it for imports, this tariff rate shall apply if and for as long as it is lower than the import tariff rate calculated according to its tiered plan in Appendix 2-A.
4. Three years after the entry into force of this Agreement, the Contracting Parties shall consult each other at the request of either Contracting Party in order to consider accelerating and extending the dismantling and elimination of import duties. If the contracting parties in the “Trade in Goods” Committee decide on such an acceleration or expansion, this decision replaces the tariff rate or the phase of reduction that was determined for these goods in accordance with the corresponding step-by-step plan.
Elimination of export duties and taxes
The contracting parties may not maintain or introduce any customs duties or taxes on the export or sale for export or in connection with the export or sale for export of goods to the other contracting party, nor any internal taxes on goods exported to the other contracting party that are via go beyond what is charged for similar goods intended for domestic sale.
After the entry into force of the agreement, the contracting parties may neither increase the tariffs in force on imports of goods originating from the other contracting party, nor may they introduce new tariffs in this regard. This does not prevent a contracting party from increasing a duty after a unilateral reduction to the level specified in its phased plan in Annex 2-A.
Import and export restrictions
1. According to Article XI GATT 1994 and the relevant notes and supplementary provisions, the contracting parties may not adopt or maintain any prohibitions or restrictions on the importation of goods from the other contracting party or on the export of goods or their sale for export to the territory of the other contracting party . For this purpose, Article XI of GATT 1994 and the relevant comments and supplementary provisions are adopted as an integral part of this Agreement.
The Contracting Parties agree that the Contracting Party intending to take a measure provided for in Article XI, paragraph 2, letters a and c GATT 1994, shall provide the other Contracting Party with all relevant information, prior to the introduction of this measure, in order to achieve a solution acceptable to the Contracting Parties to enable. The contracting parties can agree on the measures necessary to remedy the difficulties. If no agreement has been reached within thirty days of the provision of such information, the exporting Party may, on the basis of this Article, apply measures to the export of the product concerned. If special and critical circumstances, which require immediate intervention, rule out prior information or examination, the contracting party that intends to take the measures can immediately take the necessary security measures to remedy the situation; It must immediately inform the other contracting party about this.
Fees and formalities related to import and export
In accordance with Article VIII of GATT 1994 and the relevant notes and supplementary provisions, each Contracting Party shall ensure that all fees and charges of any kind imposed on or in connection with the import or export of goods (unless they are customs duties or those specified in Article 2.4 (Customs) letters a, b or c) are limited in the amount approximately to the - not calculated according to the value (ad valorem) - costs of the services provided and neither an indirect protection for domestic goods nor a taxation of the Represent imports or exports for the purpose of generating income.
2. Each contracting party shall provide information on the fees and charges levied by it in connection with the import or export via an officially announced channel, including via the Internet.
3. The contracting parties waive consular official acts1, including the associated fees and charges, in connection with the importation of goods from another contracting party.
Import and export licensing procedures
1. The contracting parties reaffirm their rights and obligations under the Import License Agreement.
The introduction and management of import or export licensing procedures2 by the contracting parties shall be carried out in accordance with
a) Article 1 (1) to (9) of the WTO Import License Agreement,
b) Article 2 of the WTO Import License Agreement,
c) Article 3 of the WTO Import License Agreement.
For this purpose, the provisions mentioned under letters a, b and c are incorporated as an integral part of this agreement. The contracting parties apply these provisions mutatis mutandis to export licensing procedures.
3. The Parties shall ensure that all export licensing procedures are neutral in their application and are handled in an appropriate, fair, non-discriminatory and transparent manner.
4. The Contracting Parties shall only introduce or maintain licensing procedures as a condition for importation into their territory or for export from their territory to the other Contracting Party if other suitable procedures for achieving an administrative purpose are not reasonably available .
5. The Contracting Parties shall not establish or maintain any non-automatic import or export licensing procedures unless this is necessary to implement a measure in accordance with this Agreement. A contracting party that introduces non-automatic licensing procedures specifies exactly which measures will be carried out with this licensing procedure.
6A Party introducing or making changes to export licensing procedures shall notify the Trade in Goods Committee sixty days prior to the publication of these procedures. This notification must contain the information required under Article 5 of the Import License Agreement.
7. Each Contracting Party shall answer inquiries from the other Contracting Party regarding licensing procedures which the Contracting Party to which the request is addressed intends to introduce or has introduced or maintained, as well as the criteria for the granting and / or allocation of import or export licenses within sixty days.
State trading company
1. The contracting parties reaffirm their existing rights and obligations from Article XVII GATT 1994 and the related comments and supplementary provisions as well as from the agreement on the interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994 in Annex 1-A of the WTO Agreement, which, mutatis mutandis be incorporated as an integral part of this Agreement.
2. According to Article XVII paragraph 4 letters c and d GATT 1994, the contracting parties can request information from the other contracting party on a bilateral basis.
Abolition of sectoral non-tariff measures
1. The Contracting Parties enter into further commitments with regard to sector-specific non-tariff goods-related measures in accordance with Annexes 2-B and 2-C (hereinafter "Sectoral Annexes"). To this end, the contracting parties may, by decision of the Trade in Goods Committee, amend the sectoral annexes.
2. At the request of either Party, the Parties will enter into negotiations with a view to broadening the scope of their obligations in relation to sector-specific non-tariff goods-related measures.
Special exemptions in relation to goods
1.This chapter does not prevent any measure which is consistent with Article XX GATT 1994 and the related notes and additional provisions; Article XX GATT 1994 and the related comments and supplementary provisions are adopted as an integral part of this Agreement.
The contracting parties agree that the executing contracting party intending to take the measures provided for in Article XX (i) and (j) of the GATT 1994 shall provide the other contracting party with all relevant information to enable a solution acceptable to the contracting parties, prior to the introduction of these measures . The contracting parties can agree on the measures necessary to remedy the difficulties.If no agreement has been reached within thirty days, the exporting Party may, on the basis of this Article, apply measures to the export of the product concerned. If special and critical circumstances, which require immediate intervention, rule out prior information or examination, the contracting party that intends to take the measures can immediately take the necessary security measures to remedy the situation; It must immediately inform the other contracting party about this.
"Trade in goods" committee
1.The Committee on Trade in Goods set up under Article 16.2 (Special Committees), on which both Contracting Parties are represented, shall meet at the request of either Contracting Party or the Trade Committee to consider any questions arising from this chapter.
2. One of the tasks of the committee is to
a) to oversee the implementation of this Chapter and Annexes 2-A, 2-B and 2-C,
b) to promote trade in goods between the Contracting Parties; this includes consultations on accelerating and extending customs elimination and on broadening the scope of obligations relating to non-tariff measures under this Agreement, as well as other issues as appropriate. As a result of these consultations, the Committee may decide to amend or expand Appendices 2-A, 2-B and 2-C as needed,
c) to deal with tariff and non-tariff measures in the trade in goods between the Contracting Parties and, if necessary, to submit related questions to the Trade Committee.
Trade protection measures
Anti-dumping and countervailing measures
1. The Contracting Parties reaffirm their rights and obligations under Article VI of GATT 1994, the Anti-Dumping Agreement and the Subsidy Agreement and apply anti-dumping and countervailing measures in accordance with the provisions of this chapter.
2. The Parties recognize that anti-dumping and countervailing measures can be used to obstruct trade and agree that
a) that such measures should be used in such a way that they are fully compatible with relevant WTO requirements, that they should be based on a fair and transparent system, and
b) that the interests of the Party against whom such a measure is to be introduced should be carefully examined.
3. For the purposes of this section, the origin will be determined according to the non-preferential rules of origin of the contracting parties.
Transparency and exchange of information
1. If the competent authorities of one of the contracting parties receive an anti-dumping application with the necessary documentation in connection with imports from the other contracting party, the contracting party shall notify the other contracting party in writing of the receipt of the application at least fifteen days before the initiation of an investigation.
2. If the competent authorities of a contracting party receive a countervailing duty application with the necessary documents in connection with imports from the other contracting party, the contracting party shall notify the other contracting party in writing of receipt of the application at least fifteen days before the initiation of an investigation and give it the opportunity to consult their competent authorities about the application in order to clarify the matter and reach a friendly solution. The Parties shall endeavor to hold these consultations as soon as possible thereafter.
3. Immediately after the introduction of provisional measures and in any case before the final determination, the two contracting parties shall ensure that all material facts and considerations on which the decision to take measures is based are fully and meaningfully disclosed. This applies without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the Subsidy Agreement. The announcement must be made in writing and must allow interested parties sufficient time to comment.
4. Each interested party will be given an opportunity to be heard so that they can make their views known in relation to the trade defense investigations.
Lower customs rule
If a Contracting Party imposes an anti-dumping or countervailing duty, this duty may not exceed the dumping margin or the countervailable subsidy margin; moreover, it should be lower than this range if a lower duty is sufficient to eliminate the injury to the domestic industry.
Consideration of the public interest
A Party shall refrain from applying anti-dumping or countervailing measures if it is clear from the information provided in the course of the investigation that it is not in the public interest to apply these measures. When assessing the public interest, the situation of the domestic industry, the importers and their representative associations, representative users and representative consumer organizations are taken into account, insofar as they have provided the investigating authorities with relevant information.
Exclusion from bilateral dispute settlement and the bilateral mediation mechanism
Chapter fourteen (dispute settlement) and chapter fifteen (mediation mechanism) do not apply to the provisions of this section.
General protective measures
1. Each Contracting Party retains its rights and obligations under Article XIX GATT 1994 as well as under the Protection Measures Convention and Article 5 of the Convention on Agriculture. Unless otherwise provided in this section, this Agreement does not give the Contracting Parties any additional rights or obligations with regard to measures under Article XIX GATT 1994 and under the Safeguards Convention.
2. A contracting party does not apply the following measures to the same goods at the same time:
a) a bilateral protective measure and
b) a measure under Article XIX GATT 1994 and the Protection Measures Convention.
3. For the purposes of this section, the origin will be determined according to the non-preferential rules of origin of the Parties.
1. Notwithstanding Article 3.6 (General Provisions), if a Contracting Party initiates a protective investigation or intends to take protective measures, the other Contracting Party shall, at the request of the other Contracting Party, and if the latter has a substantial interest, immediately, but no later than seven days before the initiation in question or introduction of written ad hoc information with all relevant information leading to the initiation of a protective measures investigation or the introduction of protective measures; this may also include information about the preliminary and final test results. This applies without prejudice to Article 3.2 Protective Measures Convention.
2. When introducing safeguards, the Parties shall endeavor to introduce them in such a way as to minimize the impact on their bilateral trade.
3. If one Party considers that the legal requirements for the imposition of definitive safeguards have been met, the Party intending to apply these measures shall notify the other Party for the purposes of paragraph 2 and give it the opportunity to hold bilateral consultations . If a satisfactory solution is not found within thirty days of the notification, the importing Contracting Party may adopt the final protective measures. The other Contracting Party should also be given the opportunity to hold consultations for the purpose of exchanging views on the information referred to in paragraph 1.
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