January 28, 2019;
Local firms looking forward to approval of EU-Singapore FTA

Local firms looking forward to approval of EU-Singapore FTA


Reduced tariffs will benefit food manufacturers here, among others

A wider range of halal food products made in Singapore could find their way to stores in Europe for its growing Muslim population, should the upcoming European Union-Singapore Free Trade Agreement (FTA) be approved.

Ratification of the trade pact early this year by the European Parliament is on the cards and businesses are looking ahead for new opportunities.

The potential agreement is good news for food manufacturers here, said Mr Ong Bee Chip, managing director of Golden Bridge Foods and its sister brand Ellaziq, which makes halal food products.

This is because reduced tariffs will allow his products, ranging from halal chicken floss to other items like lap cheong (dried Chinese sausage), to be more affordable when exported to the EU, he said, adding that he expects exports to rise by four to five times.

His factories received certification to export to Europe in the last four to six years and currently export about 10 to 12 tonnes of food products to Europe a year, he said.

The processed food product industry, with pharmaceuticals and chemicals, is particularly well placed to benefit as 84 per cent of Singapore exports will enter the EU duty-free when the FTA is implemented.

  • 84%

  • Percentage of Singapore exports
    that will enter the EU duty-free
    when the European Union-
    Singapore FTA is implemented.

With the FTA, materials from Asean countries will be deemed as originating from Singapore when incorporated into certain products. This will qualify the products for preferential tariff treatment.

Mr Ong hopes to expand into more markets if the FTA is approved. “The number of Muslims has increased significantly but not many factories do minority business. It’s a potentially big market.”

Like food companies, precision engineering company Patec, which has facilities in Hungary, expects savings to go up to €300,000 (S$463,000) – about 2 per cent of its EU revenue. About 35 per cent of its business is EU-based and it handles about €18 million worth of EU-related trade.

“The ratification of the FTA, in this period of radical protectionism, serves to underscore the importance and faith that Singapore and the EU share for free trade,” said Mr Kelvin Wee, deputy chief executive of Patec, which supplies metal components to automotive companies like Bosch.

Others, like logistics company DPEX Worldwide Express, hope to do more business with small and medium-sized enterprises in Europe that want to sell to Asia.

“Major British and German retailers are extremely loyal to their local service providers and it is difficult for an Asian service provider to break the chain (into the European market),” said Mr Donald Tay, chief executive of DPEX.

“Ironically, these local service providers turn to us for service into Asia,” he added.

Its target is to have 25 per cent of its turnover from Europe.

Meanwhile, bigger players like developer CapitaLand look forward to an “expected uptick in the flow of investment, business travellers and expatriates in both markets”, said Mr Gerald Yong, chief executive of CapitaLand International.

“This will, in turn, generate greater demand for our lodging and commercial properties,” he added. “We can also look forward to a greater competitive edge and be treated equally with EU companies when bidding for contracts in that region.”

He said his company will also deepen its presence in European “gateway” cities such as Berlin, Frankfurt and Paris.