The EU and Singapore have clinched a free-trade agreement (FTA) - the second such deal between the 27-nation bloc and a major Asian trading partner.
Last year EU-Singapore trade was worth about 74bn euros (£60bn; $97bn).
Singapore is the second largest Asian investor in the EU after Japan. The EU Commission says the deal - not yet signed by politicians - will help EU exports of cars and financial services.
An EU-South Korea FTA has been in operation since July 2011.
The EU is Singapore's second biggest trade partner after neighbouring Malaysia, Reuters news agency reports. The plan is to initial the FTA in early 2013.
The EU is also conducting FTA negotiations with Malaysia and Vietnam - like Singapore, members of the 10-nation Association of Southeast Asian Nations (Asean).
The new deal is expected to ease EU companies' access to Singapore's banking and financial services, and to its public procurement markets.
Acceptance of common standards should also help European car exporters - among the sectors hit especially hard by the current economic downturn.
The EU's trade surplus with Singapore last year was 8bn euros, with cars accounting for a big slice of the bloc's exports.
UK Prime Minister David Cameron called the new deal "a landmark moment in our relationship with Singapore".
He said it would be "good for British business and act as a gateway to other dynamic economies in Asia".
Conservative MEP Syed Kamall will be the European Parliament's lead negotiator on the FTA. He said it would offer London's professional services sector "excellent opportunities".
He called Singapore "a massive and growing market" and "a key trade hub" which would open up European access to other markets in South-East Asia.