10 February 2025

The European Commission’s ‘Competitiveness Compass for the EU’: Can regulatory simplification for EU business and greater trade facilitation coexist?
Singapore’s new Food Safety and Security Act: Implications for Singapore's food industry and for traders
Defining cider in the EU and the controversy about its apple must content
Recently adopted EU legislation

**The European Commission’s ‘Competitiveness Compass for the EU’: Can regulatory simplification for EU business and greater trade facilitation coexist?**

By Stella Nalwoga, Amanda Carlota, and Paolo R. Vergano

On 29 January 2025, the European Commission (hereinafter, Commission) presented its Communication titled A Competitiveness Compass for the EU, which is to “guide the work in the coming five years and lists priority actions to reignite economic dynamism in Europe”. Described by the President of the European Commission, Ursula von der Leyen, as a “roadmap”, the Competitiveness Compass “sets out an approach and a selection of flagship measures to translate” the recommendations of former European Central Bank (hereinafter, ECB) President Mario Draghi “into reality in the coming years”. While the “flagship measures” set out in the Communication are yet to be concretely developed, this article provides an initial evaluation of the broadly defined measures and their objectives, attempting to identify any trade facilitative benefits that businesses could anticipate, as well as the potential trade frictions that could arise from the introduction of the “European preference” being proposed in the area of public procurement.

Simplification or more complexity?

In his report on The future of European competitiveness – A competitiveness strategy for Europe, published in September 2024, former ECB President Draghi had identified three major “transformations” that the EU needed to undergo in order to boost its competitiveness, namely: 1) “closing the innovation gap”; 2) “a joint decarbonisation and competitiveness plan”; and 3) “increasing security and reducing dependencies”. To achieve these objectives, the Commission intends to roll out a series of initiatives over the next two years, some of which are discussed below.

Firstly, the Commission intends to undertake an “unprecedented simplification effort”, with the objective of reducing the reporting burdens for companies under certain EU legal instruments. A proposal for a Simplification Omnibus package, inter alia, concerning the obligations in relation to sustainable finance reporting, corporate sustainability due diligence, and the EU’s taxonomy for sustainable investment, is to be published on 26 February 2025. The Competitiveness Compass does not discuss the specifics and stakeholders have already flagged that the Commission was rushing through the review of the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and the Taxonomy Regulation without proper consultations. On 5 and 6 February 2025, the Commission organised Simplification Roundtables, but both the nature and timing of the roundtables were criticised, as they were organised as closed-door events, by invitation-only, and held a mere three weeks ahead of the publication date of the proposal. In an open letter, more than 150 civil society organisations argued that the consultation was “marked by the lack of a thorough impact assessment, absence of evidence, disregard of previous political consensus, and limited transparency, and inadequate and business-biased stakeholder inclusion”.

Secondly, the Commission intends to introduce a “28^thlegal regime” consisting of “a single, harmonised set of EU-wide rules” for companies investing and operating in the EU Single Market. The Commission describes this as a “real game changer”, as companies would only have to deal with a single, unified regulatory framework in “relevant aspects” of corporate, insolvency, labour, and tax law. This has been presented as an alternative to harmonisation, which is often hampered by protracted negotiations over the areas and the degree of harmonisation. But is the addition of a ‘28^th regime’, thereby adding to the legal frameworks across the 27 EU Member States, really a means of simplification?

Putting Europe first

Thirdly, the Commission plans to introduce a system of “European preference in public procurement for strategic sectors and technologies”, which represents a significant policy shift. This initiative aims at “reinforcing technological security and domestic supply chains, as well as simplifying and modernising rules, in particular for start-ups and innovative companies”, which would entail reviewing and amending the EU’s Public Procurement Directives. This change in approach from an open-market to a “European preference” appears to come out of the playbook of countries relying heavily on local content requirements and could raise substantial legal concerns in view of the EU’s international obligations under the WTO Agreement on Government Procurement (hereinafter, WTO GPA) and the EU’s bilateral trade agreements.

Article IV of the WTO GPA requires that each signatory, including the EU and its Member States, provide goods, services, and suppliers from other GPA parties treatment no less favourable than that accorded to domestic counterparts. The proposed “European preference” could, therefore, be challenged as a violation of this principle, if it were to result in preferential treatment for EU suppliers over those from GPA signatories. Moreover, past WTO disputes highlight the risks associated with preferential procurement policies. For comparison, Indonesia’s “local content” requirements in the electricity and telecommunications sectors have been criticised for being inconsistent with WTO rules on market access for foreign goods (see Trade Perspectives, Issue No. 17 of 23 September 2024).

Beyond the WTO framework, the EU has incorporated GPA-based non-discrimination clauses in its preferential trade agreements with various trading partners. For example, Article 14.1 of the EU-New Zealand Free Trade Agreement expressly incorporates Article IV of the WTO GPA. A system of “European preference” in public procurement could lead to disputes under those FTAs, particularly if suppliers from partner countries were to find themselves excluded or disadvantaged in the EU’s procurement procedures. This could provoke retaliatory measures or lead to dispute settlement proceedings, potentially undermining EU trade relations and market access commitments. If the EU were to proceed with this initiative, it would need to carefully design it to align the system with the EU’s international commitments.

Lastly, the Commission notes that the EU would aim at “expanding its vast network of trade agreements, opening up market access for European companies, securing greater reciprocity, while promoting open rules-based global trade governed by a modernised WTO”. The Commission emphasises the importance of diversification, stating that the EU needs “to continue adapting its offer and seeking new ways of deepening partnerships and creating benefits for our businesses”, referring to the Digital Trade Agreements, Mutual Recognition Agreements, and Sustainable Investment Facilitation Agreements, as well as to the EU’s new Clean Trade and Investment Partnerships (hereinafter, CTIPs), which the EU has recently entered into with third countries. CTIPs are a new tool introduced in the Commission’s Political Guidelines for 2024-2029 and are intended as fora through which the EU can cooperate with third countries in establishing an investment-friendly regulatory environment for EU businesses seeking to “secure supply of raw materials, raw energy, sustainable transport fuels, and clean teach from across the world”.

In the context of expanding the EU’s network of trade agreements, the recently concluded trade negotiations with Mercosur and Mexico demonstrate a renewed political impetus in the face of geopolitical tensions. At the same time, these agreements must still be ratified, a process that can be lengthy and with challenges, especially as a majority among EU Member States gathered in the Council of the EU is not assured. In recent days, reports indicate that negotiations with India appear to be progressing ahead of the next round in March 2025, but concluding negotiations with India, as well as with Indonesia, appears challenging at best and will require significant efforts and openness to compromise by all negotiating partners.

Looking ahead

Ultimately, the Competitiveness Compass is only a roadmap and, while the Commission is promising to implement important policy changes in the name of making the EU more competitive, there is still much uncertainty surrounding the specific measures described therein. A proper assessment of each proposed measure can only be done once the legislative proposals are available. Stakeholders should review the Commission’s timetable of “flagship actions” for 2025 and 2026, beginning with the introduction of the Simplification Omnibus proposal on 26 February 2025.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano

**Singapore’s new Food Safety and Security Act: Implications for Singapore's food industry and for traders**

By Alya Mahira, Caitlynn Nadya, and Paolo R. Vergano

On 8 January 2025, Singapore’s Parliament passed the new Food Safety and Security Act (hereinafter, the FSSA). The FSSA aims at consolidating Singapore’s existing food-related legislation, strengthening the country’s food safety regime to “better protect consumers and public health”, and adapting its agrifood systems to climate change and the advancement of novel foods. The FSSA replaces Singapore’s previous food-related legal acts, including the Sale of Food Act 1973 and the Wholesome Meat and Fish Act 1999, and introduces provisions related to, inter alia, traceability and record-keeping, as well as pre-market approval for “defined food”. This article discusses the key features of the FSSA and identifies the commercial implications for the relevant stakeholders.

Overview of the Food Safety and Security Act

According to Singapore’s Senior Minister of State of Sustainability and the Environment Koh Poh Koon, Singapore’s agri-food supply chain is “getting increasingly complex, involving multiple stakeholders and more potential points of failure”. Notably, with nearly 90% of its food imported, Singapore remains highly vulnerable to global supply chain disruptions. In 2024, several mass food poisoning cases occurred, leaving hundreds of people suffering from gastroenteritis symptoms. The FSSA consolidates Singapore’s existing food-related acts into a unified framework and aims at addressing food safety issues by, inter alia: 1) Requiring importers and licensable food businesses to obtain a permit; 2) Requiring food traders to keep records for traceability and recalls; 3) Requiring food and feed businesses to develop a ‘Control Plan’, outlining strategies for achieving food safety; 4) Establishing a regulatory framework for pre-market approval of “defined foods”; and 5) Increasing the maximum penalties for non-compliance.

Standardised regulatory framework for trading food-related commodities

Singapore’s existing regulatory framework for the trade in food-related commodities has been described as “uneven across different groups of food industry participants and different food types”, as some legislation regulates food by type, while other pieces of legislation concern specific activities, leading to some overlaps in scope. The FSSA aims at establishing a “commodity-neutral” and more efficient framework by eliminating redundancies, particularly relating to import and export requirements.

Trade in controlled items, such as meat, fruits, and eggs, is now consolidated in Part 3 of the FSSA, which provides for a two-tiered approach. The first tier requires food traders to obtain an export or import license from the Singapore Food Agency (hereinafter, SFA), Singapore’s national authority responsible for ensuring food safety and security, to ensure that traders have the necessary systems and processes in place to source safe and suitable food. The second tier requires every consignment of imported, exported, and transhipped food to be covered by a permit to ensure the application of food-specific safety requirements at the consignment level. Such permit only covers one consignment consisting of one type of a controlled item in accordance with the SFA’s classification. When granting the licenses and permits, the SFA will assess, inter alia, the applicant’s history of regulatory actions and compliance with previous licenses or permits. The FSSA standardises this two-tiered approach to all kinds of food, ensuring consistency and reducing the regulatory complexity for relevant food traders.

Increased traceability and record-keeping

With respect to the inspection of food products, the SFA pursues a risk-based approach, prioritising food items with higher safety risks. As such, some products may still be found unsafe for consumption after having been placed on the market. To ensure the swift recall of unsafe food products, Parts 3 and 4 of the FSSA impose traceability and record-keeping requirements on licensed food businesses, which are prescribed by the Minister for Sustainability and the Environment, and on all licensed importers. The licensee must: 1) Maintain immediate access to information on suppliers, manufacturers, and commodity descriptions; 2) Implement procedures to identify and trace food from suppliers to the next responsible entity; and 3) Implement recall procedures when, most notably, the food is deemed unsafe for consumption. These requirements may increase the operational costs for businesses to implement effective record-keeping systems and recall procedures. Businesses should start tracking the sourcing, processing, and distribution of food products, and consider mandating traceability of all food ingredients in supplier contracts.

A new flexibility for businesses to ensure food safety through the ‘Food Control Plan’

In Singapore, all food businesses must comply with the pre-licensing requirements prescribed by the SFA, which outline the necessary operational procedures to ensure food safety. The FSSA provides greater flexibility for each business to “devise and implement preventive measures suited to their operational model to ensure safe food”. This will be done through the ‘Food Control Plan’ as a general licensed condition for food businesses.

All licensable food businesses that are not engaged in primary production must design and implement a ‘Food Control Plan’, containing information related to, inter alia, worker hygiene; the design, maintenance, and cleanliness of premises and equipment; the identification of foreseeable hazards in food handling; and the appropriate corrective actions. Under this new approach, businesses have the responsibility to ensure that the processes outlined in the plan are followed. The same requirement applies to animal feed business licenses, for which operators must establish and implement a ‘Feed Control Plan’. The SFA will provide guidance on the scope of the plans in accordance with “the operating modality of the different businesses”. While this flexibility aims at allowing businesses to create effective, tailored food safety solutions, it may lead to increased costs and resources to maintain a customised plan. Businesses should consider investing in consultations, staff training, and robust monitoring systems to ensure compliance.

Enhancing the management of the application procedures for “defined food”

The FSSA introduces a category of “defined food” to help the food industry navigate the types of food that require prior approval before being supplied or advertised in Singapore. This category concerns novel foods, genetically modified foods, and “insect-like” species. In 2019, the SFA had introduced the Novel Food Regulatory Framework, which was later supplemented by the 2022 guidelines for Novel Food Safety Assessments. In 1999, the Genetic Modification Advisory Committee released guidelines on the Release of Agriculture-related Genetically Modified Organisms; and in 2024, the SFA developed the Insect Regulatory Framework, approving sixteen species of insects to be used as food. The FSSA consolidates the approval process for novel, genetically modified, and insect-based foods into the pre-market approval for “defined food”.

The FSSA also introduces new requirements for the validity, cancellation, and transfer of pre-market approvals for “defined food”, as well as penalties in case of non-compliance. The FSSA states that the pre-market approval does not have an expiry date and is non-transferable, unless expressly permitted by the SFA. The pre-market approval also cannot be revoked, except in cases of non-compliance, fraud, or situations where changes in the production method of the “defined food” occur. By establishing a comprehensive regulatory framework for “defined food”, the FSSA seeks to ensure that “any food safety risks are identified early”. This approach aims at encouraging innovation by businesses, while building trust among consumers and industry.

Implementation of the FSSA: Next steps

The FSSA still needs to receive the President’s approval. It will then be implemented in phases to allow businesses time to adapt. Regulations for “defined foods” are expected to be rolled out by the end of 2025, with full implementation of other provisions planned for 2028. In the meantime, relevant stakeholders, including traders, should take proactive steps by reviewing the FSSA and adjusting their internal operations to ensure compliance.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano

Defining cider in the EU and the controversy about its apple must content

By Ignacio Carreño García and Tobias Dolle

A draft European Commission (hereinafter, Commission) Marketing Standard for cider and perry is currently discussed in the EU. The Marketing Standard would introduce harmonised production and labelling rules for cider and perry (i.e., pear cider). The term ‘cider’ is currently used in the EU Member States for a multitude of alcoholic beverages based on apples, but with different key characteristics, including the apple must or juice content. This article reviews the diverse production rules for cider in the EU, and the EU’s attempt to harmonise.

The cider and perry market

Western Europe is the world’s largest cider market, with a consumption of about 1.28 billion litres in 2023 (56% of the global volume), of which 840 million litres in the UK. Within the EU, cider (including perry) is traditionally produced in Austria, Belgium, Denmark, France, Finland, Germany, Ireland, Italy, Poland, Spain, and Sweden. In recent times, cider consumption experienced a strong growth in Germany, Greece, and Portugal.

Content of apple must in products labelled as ‘cider’

‘Cider’ is a popular beverage obtained from the total or partial alcoholic fermentation of apple must, particularly in France and Spain. Despite its popularity, there is no EU definition of cider, which may be served still or sparkling, can be clear or with sediments, and whose alcohol content can range from 4 to almost 13%. A report of 21 April 2023 from the Commission to the European Parliament and the Council in accordance with Article 75(6) of Regulation (EU) No 1308/2013 on new marketing standards for cider and perry notes that “various types of products, ranging from products made from 100% apple juice to pre-mix products with added sugars, are currently labelled as ‘cider’”. Pre-mix ciders are more popular in Nordic countries”. As an example of traditional cider in Asturias, Spain, Sidra natural is made of 100% apple must, is not filtered and needs to be poured from a height into a wide glass to get air bubbles into the drink. According to the rules for Sidra de Asturias, a protected Geographical Indication in the EU, “pouring the cider in this ritual manner reaffirms the qualities of the drink”.

The legal foundation for a ‘marketing standard’ for cider

Article 75(1) of Regulation (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products (hereinafter, CMO Regulation) provides that ‘marketing standards’ may apply to a number of sectors, including fruit and vegetables. In order to take into account the expectations of consumers and to improve the economic conditions for the production and marketing, as well as the quality, of agricultural products, the Commission is empowered to: 1) Add agricultural sectors; and 2) Adopt delegated acts on marketing standards in order to adapt to constantly changing market conditions, to the evolving consumer demands, to developments in relevant international standards, and to avoid creating obstacles to product innovation. As a first step, the Commission is now planning to add new sectors, including cider and perry, to Article 75(1) of the CMO Regulation and, as a second step, to establish the relevant marketing standards.

The 2023 report on new marketing standards for cider and perry highlights that existing differences between national laws concerning ciders and perries could result in conditions of unfair competition, which are likely to mislead consumers and, thereby, have a direct effect on the establishment and functioning of the EU Single Market. The report notes that a new EU ‘marketing standard’ for cider and perry would bring added value, in particular in relation to the interests of consumers, the costs and administrative burdens for operators, and the benefits offered to producers and, ultimately, to end consumers.

The Commission’s draft proposal for ‘marketing standard’

A draft Commission Proposal for a Delegated Regulation establishing an EU marketing standard for cider and perry became public after being discussed in the EU’s Expert Group for Agricultural Markets, which provides advice and expertise to the Commission in relation to matters related to the agricultural market, in particular those covered by the CMO Regulation and, in that context, assists the Commission in the preparation of delegated acts.

Article 2(1) of the draft Proposal defines ‘cider’ as “the product obtained from the total or partial alcoholic fermentation of: (a) fresh apple must, or (b) a mixture of fresh apple must and apple must from concentrate”. Article 3(1) of the draft Proposal states that “Cider shall be produced from at least 50% of apple must”, while Article 2 defines “fresh apple must” as “apple must obtained solely by mechanical pressing of exclusively fresh apples, without added water” with “concentrated apple must” being defined as the “product obtained from fresh apple must by the physical removal of a specific proportion of the water content” and “apple must from concentrate” being defined as the product obtained by reconstituting concentrated apple must with potable water. Article 3(1) of the draft Proposal further states that “Cider may be produced with or without the addition of: (a) potable water, before or after fermentation; (b) fresh apple must and/or concentrated apple must, after fermentation […]; (c) a limited amount of pear must, […]; (d) food additives, including colours, authorised in accordance with Regulation (EC) No 1333/2008, […]; (e) flavourings authorised in accordance with Regulation (EC) No 1334/2008. Fortification of cider by the addition of exogenous ethanol is prohibited”.

The draft Proposal includes labelling rules, whereby the designation of the product shall be “cider”. Such labelling would be linked to the requirement that cider be produced from at least 50% of apple must. An indication of provenance must be indicated by words such as: 1) ‘cider of (…)’, ‘produced in (…)’, or ‘product of (…)’, supplemented by the name of the EU Member State or third country where the apples were harvested and turned into cider; 2) ‘European Union cider’, ‘blend of ciders from different countries of the EU’; 3) ‘European Union cider’, ‘cider obtained in (…) from apples harvested in (…)’, citing the names of EU Member States in question, for ciders made in an EU Member State from apples harvested in another EU Member State; or 4) ‘blend from’.

The Commission’s draft Proposal would set a minimum juice content of 50% for cider. While this would be in line with traditional cider production, the industrial-style cider sector, which typically uses less juice, would no longer be allowed to use the term ‘cider’ for its beverages.

A distinction between ‘cider’ and ‘traditional cider’ with a higher juice content

There are concerns with the EU’s planned standardisation of what may be denominated as cider. Denmark, Finland, and Sweden reportedly voiced their concerns about the draft Proposal on 13 January 2025 in a letter addressed to the Director-General of the European Commission’s Directorate-General for Agriculture and Rural Development. The letter states that the proposed ‘marketing standard’, in its current form, would “limit the growth of the sector, stifling innovation, new products, and communication drive growth in the beverage sector, while the proposed marketing standard may have the opposite effect”. The letter calls for a “marketing standard that is broad and inclusive, thus avoiding any serious negative consequences”.

Already in November 2019, the final Report on the “Evaluation of Marketing Standards contained in the CMO Regulation, the “Breakfast Directives” and CMO secondary legislation” concluded that, “as for the varying national requirements relating to the apple (pear) juice content of cider (“perry”), it emerged (…) that establishing a minimum level of apple (pear) juice content would be too complex a task for the time being”. As a solution, the three Nordic EU Member States could suggest a distinction between “cider” and “traditional cider” with a higher juice or must content, with the two products continuing to coexist.

Way forward: Upcoming public consultations in 2025

With respect to the Commission’s two initiatives, stakeholders will have two distinct opportunities to make contributions. First, a feedback period should be opened soon regarding the initiative of adding cider, perry, as well as dried pulses, to the list of sectors or products covered by ‘marketing standards’ under the CMO Regulation. A second feedback period would follow later this year, regarding the initiative for EU rules for the marketing of cider and perry. Stakeholders should be ready to participate in the debate by taking active part in the EU consultations and by interacting with relevant EU Institutions, trade associations, and other affected stakeholders.

For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia

Recently adopted EU legislation

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Amanda Carlota, Ignacio Carreño García, Tobias Dolle, Alya Mahira, Caitlynn Nadya, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.

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