PM Lee, Merkel keen to get S'pore-EU FTA going

Berlin

THE leaders of Singapore and Germany on Tuesday expressed their desire to see the free trade pact between the European Union (EU) and Singapore implemented as soon as possible, but there remains a number of hurdles that could take some time to clear.

While the negotiations on this landmark free trade agreement (FTA) have already been concluded, the text is still undergoing some legal scrubbing at this point, said Prime Minister Lee Hsien Loong at a joint press conference alongside German Chancellor Angela Merkel.

This is the first bilateral agreement that the 28-member EU has concluded with an Asean country. It will provide both sides with greater access to each other's markets, as services, investment and procurement markets are liberalised, and tariff and non-tariff barriers to trade will be removed.

When asked by The Business Times if the FTA could enter into force at some point in 2015, Mr Lee said that he was not entirely certain given that some of the outstanding issues would need a while to resolve.

"(The FTA) has to go through a long process, including voting in the European Parliament and the ratification by the majority of the European member states," he said.

Among the other potential speed bumps on the horizon is the fact that the competence of the European Commission to negotiate FTAs has been called into question, and this could be referred to the European Court of Justice for a ruling.

"These things may take some time, so I'm not absolutely confident that the process can be done this year. But of course, if it can be done within 2015, we would be very happy," he added.

Dr Merkel, meanwhile, made the point that it was in Europe's interest to conclude the ratification process quickly and that Germany - an exporting nation that is also the largest economy in the EU - would work hard on this matter.

"We want this FTA. The ratification shouldn't take too long, as such FTAs have a certain shelf life. The world is changing constantly as well, so we shouldn't wait too long," she said.

Mr Lee is in Berlin for the second leg of his four-day official visit to Germany, having earlier made a stop in the eastern city of Dresden.

After a grand welcome ceremony at the German Chancellery in the heart of the capital, Mr Lee and his delegation had an hour-long meeting with Dr Merkel over lunch where they discussed a range of topics such as the eurozone crisis and the Ukraine-Russia conflict.

Singapore and Germany are celebrating 50 years since diplomatic relations were first formed back in 1965. Mr Lee's trip - his second since he became prime minister more than a decade ago - also takes place at a time when Germany is marking 25 years as a reunified nation.

Last year, Germany was Singapore's largest trading partner in the EU and 14th-biggest trading partner in the world, with bilateral trade amounting to S$20 billion.

There are some 1,400 German companies present in Singapore, spread across a number of key sectors such as chemicals, electronics, engineering and logistics.

"I can safely say that our relationship is characterised by mutual trust, respect and friendship," said Dr Merkel, describing Singapore as a "valued partner" in research and economic exchanges.

Mr Lee also met separately on Tuesday three key German ministers - Vice-Chancellor and Economic Affairs and Energy Minister Sigmar Gabriel; Finance Minister Wolfgang Schauble; and Foreign Affairs Minister Frank-Walter Steinmeier.

Mr Lee and his delegation later attended a dinner hosted by the Koerber Foundation, an independent think tank in Germany.

On Wednesday, the prime minister will attend an award ceremony for German business leaders organised by the Singapore Economic Development Board before flying to Madrid to begin his first official visit to Spain.