Singapore, Australia Sign Updates to Trade Deal
Singaporean and Australian officials signed a series of updates to their existing trade deal last week, particularly in the area of services, following their latest review of the long-standing accord.
The planned additions to the Singapore-Australia Free Trade Agreement (SAFTA) are the “most comprehensive update” of any Australian free trade deal, according to Prime Minister Malcolm Turnbull.
The Australian premier announced the news in Canberra last Thursday with Singaporean Prime Minister Lee Hsien Loong, after their respective trade ministers signed the revisions.
“We recognise in our respective nations, as we do here with our national economic plan, the absolutely vital importance of free trade and open markets,” said Turnbull, citing also the shared strategic alignment between the two Pacific nations.
Lee, for his part, also praised the updated SAFTA’s potential for supporting greater trade and investment going forward.
The SAFTA entered into force in 2003, and has seen a series of updates in the years since, including in 2006, 2007, and 2011. This third SAFTA review was concluded in May 2016.
The updated agreement will now need to undergo domestic approval procedures in the two nations, with officials suggesting that this could be concluded next year.
According to Australian Trade Minister Steven Ciobo, the updated agreement will yield significant new opportunities for his country’s service providers.
“This updated FTA delivers big wins for Australian service providers with greater access and certainty in sectors such as education, law, financial, and professional services,” he said in a media release last Thursday.
E-commerce and telecommunications chapters have also been revised, addressing topics such as cross-border data flows, as well as privacy and consumer protections. The accord also foresees the future mutual recognition of professional qualifications.
Services is a significant portion of Australia’s trade with the Asian city-state, making up approximately one-third of its annual exports, according to the Australian Department of Foreign Affairs and Trade.
Reduced red tape, more business mobility
Along with the updated services provisions, officials say that the changes also include areas such as rules of origin, helping slash costs for trade in goods, as well as increased market access in public procurement.
The update accord further aims to support increased foreign investment and bring those terms – among others – in line with other trade deals that have been negotiated in recent years, such as by aligning the Foreign Investment Review Board screening thresholds for the city-state with those included in the Trans-Pacific Partnership (TPP) Agreement.
Both Australia and Singapore are among the 12 signatories to the TPP, which is currently in the ratification stage.
The revised SAFTA also includes updates to the existing terms on investor-state dispute settlement, specifically on clarifying and strengthening the provisions on the right to regulate in the public interest.
ICTSD reporting; “Singapore-Australia free trade agreement upgraded,” THE BUSINESS TIMES, 13 October 2016; “Singapore recognises more degrees from Australia under new agreement,” STRAITS TIMES, 6 May 2016.