Decision No. 16 On the commencement of the process to negotiate a comprehensive free trade agreement

Name and Surname: Timur Amanbekov Date: January 26, 2018 Word count: 502

Research Task One: Primary Legislative Acts Document: Act: Decision №16 o Institution: Supreme Eurasian Economic Council

o Title: On the commencement of the process to negotiate a comprehensive free trade agreement with the Republic of Singapore.

Commentary:

The Decision №16 initiates the process of negotiating the free trade agreement between the Republic of Singapore and the Eurasian Economic Union. The decision is based on the Article 7 of Treaty on The Eurasian Economic Union, which granted the SEEC the right to negotiate the procedure for the international cooperation with a third party upon completion of all internal legal procedures by the Member States. The free trade agreement would grant reciprocal benefit of both parties. The total territory of EEU reaches 20 ml. sq. km. and considered an increasingly developing market with approximately 182 million consumers. The major production of the EEU is mineral fuels, including oil, which contributes 14.6% to the total world extractions and natural gas with 18.4% share of the global production. The Republic of Singapore annually imports $47 billion worth of refined and crude petroleum, which contributes 18% to the total imports of the country (OEC, 2018). Furthermore, the large portion of Singaporean exports lays on the oil and gas refining equipment, medicaments and integrated circuits, which are largely imported by the EEU countries. The free trade agreement would significantly contribute to the economies of both parties along with the positive effect on countries’ internal markets.

Secondly, the decision contributes to the development of the cooperation between the EEU and the Association of Southeast Asian Nations, which Singapore is one of the founding partners of. The importance of the partnership with ASEAN was emphasized by Dmitry Medvedev, the prime-minister of Russian Federation, on the Twelfth East Asia Summit in Manila. ASEAN is the 4th biggest market of the World with the GDP of $7.5 trillion and total population of 639 million people. Thereby, the decision №16 of the SEEC is potentially the first step towards the unprecedent inter-bloc free trade agreement.

Furthermore, the increase of foreign direct investment flow is considered as one of the foreground tasks of certain country-members of EEA. According to the World Factbook, the total Singapore’s Direct Investment Abroad in 2016 reached the mark of $682 billion, putting it on the 15th place in the list of the World’s biggest investor countries (The World Factbook – CIA, 2017). The creation of the FTA with the Republic of Singapore would initiate the increase in the enterprise cooperation and higher inflow of direct investments in the economies of EEA member-states. By the end of 2017, several Singapore-based enterprises were present as the investors on the EEU market, which are Changi Airports, Olam International and Singapore Technologies Engineering. The latter is a co-founder of “Kaz-ST Bastau”, one of the leading aviation engineering companies in Kazakhstan. Changi Airports and Olam International have the multilateral agreements with Basic Element and Sberbank, the large international corporations based in Russian Federation. Thereby, the development of the cooperation would positively influence the private sector of the EEU and, consequently, countries’ economies.

References

OEC. (2018). Singapore (SGP) Exports, Imports, and Trade Partners. Available at: https://atlas.media.mit.edu/en/profile/country/sgp/ [Accessed 24 Jan. 2018].

The World Factbook - CIA. (2017). Country Comparison: Direct Foreign Investment - Abroad. Available at: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2199rank.html [Accessed 24 Jan. 2018].