EU Trade with Singapore

The EU as of 2007 comprises 27 Member States. Singapore benefits greatly from the EU enlargement in many ways, not least economically. A single set of trade rules, a single tariff, and a single set of administrative rules apply across the whole of the Single Market of the enlarged Union. This simplifies dealings for Singaporean firms doing business with the EU. The EU is the world’s largest economy with a 30% share of world GDP, and its 500 million inhabitants make it the world’s most lucrative consumer market. It is also the world’s largest trading block, accounting for 18% of world trade, or 30% if one takes into account trade between EU Member States. Out of the top 10 trading nations, six belong to the EU.

In 2006 the EU was Singapore's 2nd largest trading partner after Malaysia. The EU accounts for 11.3% of Singapore's total external trade, purchasing 11.1% of Singapore's exports and providing 11.4% of its imports. These figures put the EU ahead of the US, China and other ASEAN members (except Malaysia). In 2006 EU-Singapore overall merchandise trade amounted to S$91.2 billion, a 40% increase from its 2003 level of S$65.1 billion.

Singapore was the 16th largest client for European merchandise trade, and the destination of 1.7% of the EU's total export in 2006. This makes it the EU's largest export market in Southeast Asia. EU's exports to Singapore are concentrated in machinery and transport equipment (accounting for 55%), chemicals (13.4) and miscellaneous manufactured articles (10.8%). The EU's overall imports from Singapore are concentrated in machinery and transport equipment (55.6%) and chemicals (31.6%).

The latest available figures from the end of 2005 show that the EU was by a clear margin the most significant source of FDI in Singapore. The EU FDI stock amounted to S$104 billion (some 34% of total), with the USA at S$43 billion and Japan at S$41 billion. The EU FDI stock in Singapore has seen very strong growth in the past decade, increasing from S$25 billion to S$104 billion during the period 1996-2005. The profitability of EU FDI in Singapore has been among the best of all investor countries since 2000. The most important sectors for EU FDI in Singapore are manufacturing as well as financial and insurance services. Over 2000 EU companies are estimated to have a presence in Singapore.

At the end of 2005 the total stock of Singaporean FDI in the EU stood at €10.8 billion, which accounts for roughly 6% of Singapore’s total investment stock abroad. This makes Singapore the 7th biggest external investors within the European Union, well ahead of countries like Hong Kong, China, Russia or any Latin American country. The most important sectors for Singaporean investment in the EU are financial and insurance services, real estate, manufacturing and transport.

At the end of 2005 Singapore hosted 61% of EU FDI in ASEAN, and 14% of the total EU FDI stock in Asia. Despite the intensifying competition for FDI among Asian countries Singapore was the third largest Asian destination for EU FDI, only after Hong Kong and Japan, and way ahead of mainland China. Singapore on the other hand accounts for 80% of the FDI from ASEAN to the EU and out of all Asian FDI to the EU it ranks 2nd with a share of 14%, only after Japan.

For further analysis of the EU-ASEAN and EU-Singapore trade relations, please download our trade & investment booklet.

For economic and trade indicators for the European Union and Singapore, click here.

For economic and trade indicators for the European Union and ASEAN, click here.

For economic and trade indicators for the European Union and its main trading partners, click here.