MVT143/2002 - Sunday 1 November 2002
Singapore-Australia Free Trade Agreement to Create Broad Opportunities
"Australia and Singapore have finalised a Free
Trade Agreement (FTA) that will create a wide range of opportunities
for Australian business" Trade Minister Mark Vaile announced today.
"The Singapore-Australia FTA (SAFTA) is Australia's first FTA since
the conclusion of the Australia-New Zealand Closer Economic Relations
Agreement nearly twenty years ago." Mr Vaile said.
"SAFTA will be a comprehensive agreement, promoting greater economic
integration and bilateral relations between our countries, it shows
that FTAs can deliver concrete outcomes in a shorter time frame than
is possible in the WTO, while complementing and reinforcing the multilateral
process," Mr Vaile said.
In addition to eliminating tariffs on goods, SAFTA establishes a
more open, predictable and transparent framework for bilateral trade
and investment across a wide range of areas. These include trade
in services, investment, telecoms regulation, competition policy,
government procurement, technical standards, intellectual property,
electronic commerce and customs procedures.
"Australian service suppliers and investors in sectors such as legal,
financial and professional services, telecoms, education and environmental
services will be the main beneficiaries of the FTA" Mr Vaile said.
SAFTA also provides a framework for mutual recognition of technical
standards and professional qualifications that will benefit business
in very practical ways.
Mr Vaile acknowledged the support and cooperation of the Australian
Electrical and Electronic Manufacturers Association (AEEMA) and other
industry organisations, financial institutions, companies and professional
bodies in making this agreement possible.
"We expect to officially sign the document in the next few months"
Mr Vaile said.
Media Contact: Robyn Bain 0408027839
Attachments: Summary of key outcomes for Australia, Backgrounder
SINGAPORE-AUSTRALIA FREE TRADE AGREEMENT
Summary of Key Outcomes for Australia
- Elimination of all tariffs from entry into force, including
on Australian beer and stout
- Comprehensive and transparent 'negative listing' of services
- Restrictions on the number of wholesale banking licenses to
be eased over time
- Banks to be allowed to transfer information, including
electronic data, to Australia
- Conditions eased on establishment of joint ventures in involving
Australian law firms
- Number of Australian law degrees recognised in Singapore
doubled from 4 to8
- Removal/easing of residency requirements for Australian
- Mutual recognition agreements (MRAs) between architects
and engineers under way
- National treatment and market access commitments for Australian
- Singapore government overseas scholarships will be tenable
at Australian universities
- The environmental services sector will be largely open
to Australian businesses
- Open market access and national treatment for a range of other
- Transparency of investment restrictions in Singapore's
- Investors protected against expropriation; compensation
for expropriation or other loss
- Telecoms regulators must operate in transparent manner
and properly explain decisions
- Telcos have right of appeal to an independent authority
- Telecom interconnection provided on non-discriminatory,
timely, cost-oriented terms
- Telecoms regulators to adopt or maintain effective sanctions
to enforce decisions
- Agreement to facilitate consultation with telecoms industry
- Australia firms get national treatment in procurement
by 47 Singapore agencies
- Protection of intellectual property supplied in government
- Short term entry for Australian business people extended
from 1 month to 3 months;
- Long-term business residents in Singapore granted total
stay up to at least 14 years.
- Spouses of business people can work as managers, specialists,
- Commitment to address anti-competitive business practices
- Consultation upon request on anti-competitive practices
of particular concern.
- Competitive neutrality disciplines to apply to government-owned
- Cooperation on eliminating trade in goods infringing intellectual
- Measures to prevent the export of goods infringing copyright
or trade marks
- No customs duties on bilateral electronic transmissions
- Agreement to facilitate paperless trading in order to
reduce business transaction costs
- Promotion of confidence in bilateral e-commerce, e.g in
- Annexes under negotiation on food standards and horticultural
- Cooperation on investigation and prevention of infringements
of customs law
SINGAPORE-AUSTRALIA FREE TRADE AGREEMENT
SAFTA negotiations were launched following an announcement by Prime
Ministers Howard and Goh Chok Tong at the APEC Leaders' Meeting in
November 2000. Ten full rounds of negotiations were held between
April 2001 and October 2002. The final agreement will be subject
to Cabinet-level approval and parliamentary consultation processes
prior to entry into force, possibly by mid-2003. The principal elements
of SAFTA, as agreed in principle, and outcomes of interest to Australian
business are described in more detail below in relation to the main
chapters and sectors.
Trade in Goods
Singapore and Australia will eliminate tariffs on all goods imported
from the other country from the date this Agreement comes into effect.
For Australia this means duty free entry of beer and stout while all
other Australian products already enjoy duty free entry into Singapore.
The parties also agree not to use export subsidies, nor to apply safeguards
measures against each other.
Rules of Origin
For most goods, the 50% value added rule of origin will apply as
under the Australia-New Zealand Closer Economic Relations Agreement.
For a limited number of electrical and electronic items, and products
subject to Tariff Concession Orders (not made in Australia), the threshold
will be 30%. Origin content can be calculated on the basis of accumulation,
except for a range of products including textiles, clothing and footwear,
passenger motive vehicle items and jewellery: accumulation takes into
account all stages of the manufacturing process in one country when
the manufacturing process is interrupted by offshore processing, provided
that the ownership of the material in question does not change before
and after offshore processing. To ensure the rules of origin are
applied properly each country has a designated body responsible for
issuing certificates of origin, and manufacturers are required to
provide a declaration of origin for each shipment.
This Chapter builds on the Australia-Singapore Mutual Recognition
Agreement on Conformity Assessment and provides for the development
of arrangements for the acceptance of the equivalence of mandatory
requirements in accordance with sectoral annexes. Negotiations are
well under way on sectoral annexes covering food standards and horticultural
Australia's and Singapore's respective Customs administrations will
work towards having electronic means for all customs reporting requirements
as soon as practicable, and agree to provide electronic systems to
support business applications between each Customs administration
and its trading community. The two governments agree to enhance the
exchange of information to assist in the investigation and prevention
of breaches of customs law.
Non-discriminatory national treatment is guaranteed in tendering
for government business with a specified list of agencies in each
country. Australia gains access to such treatment in procurement
by 47 Singapore ministries, agencies and statutory authorities as
listed in the WTO Government Procurement Agreement (GPA), to which
Australia is not a Party. Australia's access is not constrained by
Singapore's GPA restrictions on thresholds and coverage of products
and services. The two governments also commit to protecting intellectual
property and confidential information supplied in tender processes.
Services - general
SAFTA's services framework requires both countries to treat each
other's service suppliers on the same terms as their own businesses
(national treatment) and to remove quantitative and other market access
restrictions on service suppliers. All exceptions must be listed.
This approach delivers a much more liberalising and transparent agreement:
all exceptions must be reserved or they are deemed to be liberalised.
In terms of the restrictions removed or bound in this chapter, Australia
has achieved substantial outcomes across a broad range of services
sectors, as described below.
Singapore has bound recent liberalisation initiatives in areas including
banking licenses, insurance and securities markets. These bindings
will give Australian financial services providers and investors a
more certain business environment. In addition, restrictions on the
number of wholesale banking licenses available to Australian banks
will be eased over time. Singapore has commited to allowing the Singapore
branch of any Australian bank to transmit data to its head office,
sister branches and subsidiaries of the bank and to bind future reforms
it makes in this area.
Conditions on the establishment of joint ventures in Singapore involving
Australian law firms will be eased, putting them on a more level playing
field compared to large US and UK law firms. The number of Australian
universities whose law degrees are recognised in Singapore will increase
from 4 to 8, thereby enhancing the attractiveness of Australian
universities for Singaporean students. Singapore has also bound liberal
conditions of access for Australian law firms and lawyers in relation
to the practice of Australian law, third country law, and international
Singapore has removed or eased residency requirements for Australian
professionals such as architects, engineers, accountants and auditors.
The FTA also provides a framework for Australian professional bodies
to negotiate mutual recognition agreements (MRAs) with their counterpart
bodies in Singapore. Australian architects and engineers are currently
seeking to conclude MRAs covering registration of professionals and
recognition of their qualifications.
Singapore is making full national treatment and market access commitments
for university, adult and vocational and technical education, with
only some limited exceptions. These commitments will ensure that
Australian education providers face liberal conditions in offering
education services to Singaporean students. Singapore government
scholarships for overseas use will be tenable at Australian universities.
Aspects of the administration of these scholarships that may have
discouraged students from using them in Australia have been removed.
Environmental and other services
The environmental services sector will be open to Australian businesses
apart from some restrictions in the areas of waste water and hazardous
waste. Singapore has given full market access and national treatment
commitments in a range of other sectors of interest to Australian
exporters, such as construction, sporting services, computer and related
services and auxiliary transport services.
SAFTA will improve the environment for Australian investment in Singapore.
Australian investors will receive national treatment placing them
on a par with local competitors except in areas specifically exempted.
They will enjoy greater transparency in relation to investment restrictions
in Singapore's government-linked companies. Australian investors
will also enjoy protection against expropriation and will be entitled
to compensation should expropriation or other loss occur. No changes
are required to Australia's foreign investment screening processes,
nor to current restrictions on foreign ownership controls, e.g. on
institutions such as Telstra and Qantas.
SAFTA establishes disciplines for telecoms regulation by both countries
that expand significantly upon WTO commitments. Regulators must operate
in a transparent manner and properly explain decisions in relation
to such matters as the approval of commercial terms and conditions
and standards and the adjudication and resolution of disputes. Parties
aggrieved by regulatory decisions will be able to appeal to an independent
authority. Telecoms having major supplier status in a particular
segment of the market must provide other suppliers with interconnection
on terms that are non-discriminatory terms, in a timely fashion, and
cost-oriented rates. Both governments commit to maintaining effective
sanctions to enforce competitive safeguards and regulatory decisions,
and to facilitate consultation with industry participants, including
in the development of industry standards.
Movement of Business People
The initial period of stay granted to Australian business people
and professionals visiting Singapore to negotiate the sale of goods
or services, establish an investment, or fulfil a short-term contract
for their company, will increase from 1 month to 3 months. Long-term
business residents working for Australian companies in Singapore will
be granted an initial period of 2 years, extendable on application
up to at least 14 years. Conditions for spouses of long-term business
residents in Singapore who wish to pursue careers will be more secure:
spouses will be guaranteed the right to work in managerial, specialist
and professional occupations and in office administration.
The two governments commit themselves to address anti-competitive
business practices and to consult with each other upon request in
relation to anti-competitive practices of particular concern. They
undertake to ensure that government-owned businesses will be subject
to competitive neutrality disciplines. Singapore has only recently
commenced a process of developing a general competition regime. The
competition policy provisions will be reviewed to consider extending
them once Singapore enacts a generic competition law.
As well as confirming their WTO commitments on intellectual property
protection, Australia and Singapore will cooperate on eliminating
trade in goods infringing intellectual property rights, including
by exchanging information. They also agree to take measures to prevent
the export of goods that infringe copyright or trade marks.
Australia and Singapore agree to continue not to impose customs duties
on electronic transmissions between them. They undertake to make
publicly available electronic versions of all existing publicly available
trade administration documents by 2005, and to cooperate to enhance
the acceptance of paperless trading bilaterally and internationally.
To promote confidence and trust in bilateral e-commerce, each government
will maintain e‑commerce consumer protection and electronic
authentication legislation; work towards the mutual recognition of
electronic signatures; encourage the interoperability of digital certificates
by business; and take measures for personal data protection.
Sunday, 19-May-2013 22:04:16 EST