Singapore, European Union agree to start trade talks

Singapore and the European Union have agreed to start talks for a free trade pact, reviving a plan to forge a closer trade link between Southeast Asia and Europe which was halted earlier this year, Singapore said on Tuesday.

Minister for Trade and Industry Lim Hng Kiang said the free trade agreement with the EU, Singapore's largest trading partner, would "lay the ground" for closer ties between the EU and 10 countries in Southeast Asia.

"The EU's decision to proceed with a bilateral FTA with Singapore is a positive development. It demonstrates the importance of this region," Lim said in a statement.

Negotiations between the EU and the 10-nation Association of South East Asian Nations (ASEAN) to create an EU-ASEAN free trade pact began in 2007, but due to slow progress, both sides agreed to pause in March 2009, the statement said.

The Singapore-EU FTA will contribute to regional economic integration by paving the way for an EU-ASEAN FTA, it said.

In the first 11 months of 2009, Singapore's total trade with the EU stood at S$78.6 billion ($55.98 billion), accounting for 11.6% of Singapore's total trade, the statement said.

In 2008, Singapore was the EU's 15th largest trading partner globally, and EU-Singapore trade accounted for a third of all EU-ASEAN trade, making Singapore the EU's largest trading partner amongst ASEAN member states.

The Singapore government did not say when it expects the talks to be completed. 

 SINGAPORE, Dec 22 (Reuters)