BRUSSELS - Singapore and the European Union have inked a landmark trade agreement, hailing it as a signal of their commitment to open trade and its potential to benefit their people.

Prime Minister Lee Hsien Loong signed the EU-Singapore Free Trade Agreement (FTA), alongside European Council President Donald Tusk, Austrian Chancellor Sebastian Kurz - whose country holds the rotating EU presidency - and European Commission President Jean-Claude Juncker on the sidelines of the Asia-Europe Meeting (Asem) summit in Brussels on Friday (Oct 19).

PM Lee told BBC Radio: "It is an ambitious trade deal, it is a high quality arrangement, and it is one which will fly the flag and encourage others, I hope, to do the same."

European leaders have described the deal as a symbol of their commitment to free trade and its potential to benefit their people at a time when protectionism is on the rise. They also see it as a pathfinder to a wider FTA with Asean.

PM Lee and his EU counterparts also witnessed the inking of the EU-Singapore Investment Protection Agreement and EU-Singapore Partnership and Cooperation Agreement. Minister-in-charge of Trade Relations S Iswaran and Foreign Minister Vivian Balakrishnan signed for Singapore.

The new FTA will further free up access for each side to the other's market and offer opportunities for Singapore companies to bid for jobs with European government entities including at local levels, and vice versa.

It also recognises the complex nature of global supply chains by allowing some products that draw on material from Asean but are put together in Singapore to be exempted from customs duties.

The two-day Asem summit saw 53 partners commit to strengthening multilateralism.

"As a small country, Singapore feels more acutely than most the need for a strong multilateral system," PM Lee told fellow leaders. "But such a system actually benefits all countries big and small."

EU-Singapore Free Trade Agreement signed! 🇪🇺🇸🇬



Our first FTA in the ASEAN region means more opportunities for our companies, and closer ties with our great partner in South-East Asia.

The EU remains committed to free and fair trade.

The FTA: https://t.co/32Y293wR6J pic.twitter.com/FJrNy5dLC1 — Charles Michel (@eucopresident) October 19, 2018