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Dim sum in the EU? SBF aims to help Singapore companies make inroads into Europe
WITH food security becoming an increasing concern for many countries during a pandemic, the food manufacturing sector could gain prominence, creating new business opportunities, including for export, said the Chief Executive Officer of the Singapore Business Federation (SBF), Ho Meng Kit.
This is especially opportune now that the European Union-Singapore Free Trade Agreement (EUSFTA) came into force on Nov 21 last year.
The agreement allows certain Asian food products to enter the EU market tariff-free under more flexible rules of origin, up to a combined quota of 1,250 tonnes per year.
"We have yet to utilise this quota. I wonder how many of our food manufacturers even know that such a quota is available and that such opportunities are available," said Mr Ho.
He said this is one area the SBF hopes to work on, possibly with the Singapore Food Manufacturers' Association, to reach out to companies with key information on the size of the market in Europe and which cities or countries the opportunities lie in.
On the part of SBF, Mr Ho hopes to find business-to-business (B2B) marketplaces in Europe that the Federation can connect Singapore's food manufacturers, particularly small and medium-sized enterprises (SME), with.
"The agreement facilitates growth, but first there must be a demand," Mr Ho said.
"What we want to do is to generate the demand. I think that demand is generated if we can put businesses together. We can provide them with more information, then they can use the FTA to facilitate and optimise that trade."
Such market events to boost networking among companies - beyond just food manufacturers - in both Singapore and the EU is one initiative Mr Ho hopes to bring back, with Covid-19 pandemic bringing business travel to a standstill.
Previously, SBF used to mount business delegations together with political leaders on official trips to the EU, which led to many people-to-people and business-to-business exchanges between the two, Mr Ho said, adding that he hopes these will resume when travel is allowed.
In the meantime, a useful complement to this format would be having online marketplaces for businesses on both sides, particularly SMEs, to connect with one another, Mr Ho said.
"Our aim, really, is to cascade the benefits of (the FTA) to the smaller companies. For the smaller companies, it'll be harder now because they can't travel, and they don't know the European partners," he added.
This can take the form of virtual events, or an online platform with a listing of companies so that buyers and sellers can look one another up.
"If I'm a company selling a whole range of dim sum, I can put my shop front there ... and you have to onboard buyers, and they could be from Frankfurt or Spain," Mr Ho said.
The entire transaction, from payment to order fulfilment and shipping, can be conducted online.
"I think this is the way to go - try to connect our SMEs to customers through digital marketplaces as one additional means of facilitating and enhancing trade," he said.
SMEs also face challenges in unpacking the terms of the FTA, which Mr Ho said is "not written in plain English", and this requires the help of experts and lawyers to interpret.
This is where SBF hopes its FTA Education and Outreach Advisory service can help SMEs that do not have the resources that larger companies have.
In the last year or so, the Federation has offered about 110 advisory services free of charge to companies on technical areas such as rules of origin and self-certification.
In particular, the SBF has received enquiries about the FTA from interested companies that specialise in industrial equipment and machinery, chemicals, food products, cocoa, frozen food, electronics and glassware.
One aspect of the EUSFTA that Mr Ho said he hopes businesses can eventually take advantage of is that of regional cumulation.
Rules of origin
"It allows us to use ASEAN origin materials to produce the goods, and qualify those under rules of origin for export to the EU," he said, noting that this would become more useful when more countries in South-east Asia eventually ink FTAs with the EU, and the relevant arrangements are put in place.
Vietnam is the only country other than Singapore to have an FTA with the bloc at the moment, which opens up opportunities for collaboration between Singapore and Vietnamese companies hoping to trade with the EU, he said.
As the EUSFTA gains traction among companies in both EU and Singapore, Mr Ho is hoping that a "generation two agreement" can take shape in the next five years to position it for the future, tailoring it to the digital economy as well as a crisis readiness plan that can respond to future pandemics.
Taking lessons from the Covid-19 crisis, a pandemic response plan could reduce supply chain disruptions, allowing medical equipment and food to flow freely across the borders, he said.
As for the digital economy, while the EUSFTA currently has an e-commerce chapter, Mr Ho believes it can be made even more progressive, given that there is "great fintech development" in Singapore and many European cities like Berlin and Frankfurt.
"We should try to modernise our e-commerce (chapter) to look at other features, things like artificial intelligence, data protection, even looking at data privacy matters, which are very important to the EU," he said.
For example, provisions could be made to enable Singapore and EU fintech companies to cooperate or participate in one another's regulatory sandboxes.
Such digital economy agreements are in place between Singapore and countries like Australia and New Zealand, and Mr Ho believes they can be tailored for the EU as well.