Singapore is the biggest trade partner for Finland and the EU in Southeast Asia, and the Free Trade Agreement is the first trade agreement between the EU and an ASEAN country. The agreement dismantles technical barriers to trade, removes customs duties and opens opportunities for both service trade and the public procurement market. Singapore offers interesting business opportunities in the strength areas of Finnish companies, such as health care and services for old people, digitalisation and renewable energy.
Singapore is an open economy, and it applied exemption from customs duty to the majority of commodities in goods trade already prior to the agreement. However, the Free Trade Agreement guarantees commitment to exemption from customs duty, in addition to which Singapore has undertaken to remove nearly all the remaining customs duties at the latest within five years. For Finnish companies the stability of customs levels guaranteed by the Free Trade Agreement is important especially as concerns exports of cars and alcohol.
As the agreement entered into force, the EU immediately exempted 80 per cent of Singapore's imports. Trade will be exempt from duties almost fully after transition periods of 3–5 years. Transition periods will be applied particularly to agricultural products, but also to textiles, bicycles and sports shoes. The EU entry price system is maintained for certain fruit and vegetable products.
Dismantling trade barriers makes market access easier especially for small and medium-sized enterprises. Companies save time and money when customs procedures become faster and simpler. The agreement encourages the one-stop-shop principle to speed up paper work. Recognition of EU standards and testing methods eases exports of cars, car parts and certain electronic equipment. For meat, milk and other animal products, Singapore also accepts the EU's inspection systems in full instead of individual plants. The FTA also includes a separate chapter on the removal of barriers to trade in renewable energy. The aim is to stimulate green growth.
Trade in services accounts for about 75 per cent of Singapore's economy. Opportunities for increasing trade in services can be considered the most important achievements of the agreement. Singapore opens its markets in several export branches important for Finland, such as construction services, IT services and research and development services. The regulations included in the agreement on transparency and non-discrimination create predictability and equal operating conditions in certain services sectors. In addition, the agreement opens up new possibilities for exports of environmental services. The agreement also provides a framework for mutual recognition of the qualifications of accountants, engineers and lawyers.
The market value of Singapore's public procurement is EUR 20 million per year. Companies had good access to Singapore's public procurement due to the commitments made in the World Trade Organization Agreement on Government Procurement. The Free Trade Agreement increases opportunities for market access by including new procurement units in the agreement, such as Singapore's environmental and energy market authorities, and by lowering the value threshold of contracts subject to open tendering. The agreement also improves the transparency of Singapore's procurement procedures.
The agreement strengthens the already high protection of intellectual property rights. In addition to general principles, agreements are made on questions related to copyright and related rights, trademarks, Geographical Indications, patents and enforcement.
Exporters must obtain the status of approved exporter in order to make out origin declarations of export consignments, in which the value of the originating products exceeds EUR 6.000. The authorisation for an approved exporter is granted, upon application, by the Finnish Customs. If the value of the originating products in an export consignment does not exceed EUR 6.000, it is not necessary to obtain the status of approved exporter.