Singapore-Australia Free Trade Agreement - One Year On

Introduction

His Excellency George Yeo, Singapore Minister for Trade and Industry, excellencies, distinguished guests, ladies and gentleman.

It is my great pleasure to address this business luncheon on the occasion of the first review of the Singapore-Australia Free Trade Agreement.

Without doubt SAFTA is already a success - facilitating trade and investment between our two countries.

Before discussing today's first review of SAFTA, I wished to initially remind everyone why we negotiated this agreement and what the agreement encompassed.

Australia and Singapore have had a long-standing, strong and constructive bilateral relationship which has covered the full spectrum of economic, political, defence, social and cultural endeavour.

Singapore is Australia's closest strategic and economic partner in our immediate region and importantly both countries have a shared belief that open trade will lead to greater economic prosperity.

Reflecting all of this, and our desire to strengthen even further our economic links with benefits to both countries, we negotiated an FTA - which entered into force on 28 July 2003.

SAFTA provides for improved conditions of access for Australian goods and services in a wide range of sectors, for example:

SAFTA eliminates remaining Singapore tariffs
it guarantees liberal conditions of access for many service suppliers, including in the legal, financial and education sectors
it provides a more open and predictable business environment across a range of areas including telecommunications regulation, competition policy, government procurement, technical standards, intellectual property, e-commerce, customs procedures and business travel.

During the first twelve months of SAFTA, benefits from the agreement have already become evident:

business from both countries has noticed improved conditions of access provided by the agreement
Australian business has enjoyed a more open and predictable environment across a range of sectors in Singapore
since SAFTA entered into force, Austrade has helped over 160 companies - many of them new exporters - enter the Singapore market with deals worth over $120 million
this is only a start, and the full extent of the stimulus that SAFTA will provide to bilateral commerce will only be evident over the longer-term.

SAFTA First Review

Under SAFTA, both countries agreed to review the implementation and outcomes of the agreement after 12 months, and then at two year intervals, to ensure the agreement's ongoing relevance for business.

Prior to this first review we have been encouraging feedback from business on the agreement

this has been positive, but of course there are areas where enhancements are possible
and we have been examining what adjustments can be made to the agreement to promote improved trade and investment opportunities.

Minister Yeo and I agreed today to launch the first review of SAFTA. As part of this review process, we have agreed on the following which provide the potential for even greater benefits to our respective economies:

completion of two annexes to the agreement on Horticulture Goods and Food Standards - these will facilitate Singapore's exports of orchids and foliage to Australia while the food annex will provide procedures for the mutual recognition of the other party's standards and compliance procedures.
Singapore has agreed to recognise law degrees from additional universities, initially from the University of Tasmania and the Murdoch University. Australia will add four entities to the list of agencies covered under the Government procurement chapter of the agreement.
We have agreed to commence work on the modification of Australia's reservation lists on services and investment to extend their coverage to the States and Territories, and the incorporation into SAFTA of improved conditions for legal joint ventures and the lifting of the quota on wholesale banking licences in Singapore.
We have also endorsed a forward work program to maintain the pace of integration between the Australian and Singaporean economies through ongoing cooperation in the areas of:
- e-commerce and telecommunications;
- regulatory reforms covering competition, education, industry and other government policies;
- improvements to the rules in SAFTA, particularly in the investment chapter and on rules of origin;
- commitments under the government procurement chapter; and
- ways to promote even closer business links through SAFTA.

As we move forward we will continue to welcome the input of business to make this agreement even more beneficial for you.

SAFTA opportunities

The results produced by SAFTA over the past year have been impressive - but there is considerable potential to expand bilateral commercial links.

SAFTA also provides scope for commercial cooperation in third country markets in South-East Asia.

I encourage all of you to examine the opportunities presented by SAFTA - DFAT has produced a handy business guide "SAFTA - a business guide" to facilitate your making the most of the improved business prospects.

In passing I thought I would mention some of the pluses associated with the Singapore market - please step in George (Yeo) if there is anything I have left out. Singapore is:

a major transportation and financial hub in the region;
globally highly ranked as a good place to do business;
Australia's largest trade and investment partner in ASEAN - it is our eighth largest merchandise and fifth largest services export market;
Singapore's economy is growing strongly again - with GDP growth in excess of 5 per cent expected in 2004; and
the Singapore Government's 2004 budget introduced a range of taxation measures and other incentives which are designed to foster business activity by local and foreign investors.

Australia and Singapore are two economic partners with very sound economic fundamentals, prudent macroeconomic policy, and a commitment to economic openness

I encourage you to take advantage of these opportunities and synergies and help forge even closer bilateral economic links between our two countries.

Australia's ambitious trade agenda

The SAFTA agreement is one part of the government's very ambitious trade agenda and its commitment to pursue every opportunity - be it at the multilateral, regional or the bilateral level - to expand access for Australian trade in global markets.

The WTO Doha round remains Australia's top trade priority - multilateral liberalisation offers the best chance for the largest gains for our exporters.

Despite the often heavy going, Australia continues to push the key players hard - recent developments have been more positive

at last the EU has put the elimination of EU export subsidies on the table - albeit as a conditional offer
WTO members appear committed to working towards a framework package that will guide the next phase of the Doha negotiations.

In parallel, the Government is pursuing bilateral and regional trade agreements - we will pursue FTAs where these can deliver significant economic gains ahead of the timeframe possible in the WTO - as SAFTA does.

Major partners and markets in our Asia-Pacific region have been our focus - we have achieved some major successes which have provided real gains for Australian exporters.

You will be aware that the Thai-Australia Free Trade Agreement (TAFTA) was signed by Prime Ministers Howard and Thaksin on 6 July.

This was a landmark deal for both countries - Australia's first FTA with a developing economy and Thailand's first with a developed economy.

And of course, the FTA we have concluded with the US is truly an historic agreement

providing improved access for Australian exporters to the world's largest importer - a market of around 300 million people.

In North Asia, last year the Government concluded Trade and Economic Frameworks with China and Japan - two of our major economic partners

we are seeking to deepen economic integration with China and a joint study into a possible FTA is now underway - the commercial potential is obviously enormous.

In early July we had further great news for Australian business when ASEAN Foreign Ministers welcomed the proposal to launch FTA negotiations between ASEAN and Australia and New Zealand

an FTA would build on the already close trade and investment links between Australia and the ASEAN region
with 500 million people and a combined GDP of nearly US$700 billion, ASEAN offers exciting prospects for Australian exporters
I will be discussing next steps to launch the FTA when I meet with my ASEAN and New Zealand colleagues in Indonesia in September.

Through our FTA negotiations, Australia's engagement with Asia has never been better.

Pursuing opportunities for business

FTAs such as SAFTA are a demonstration of the Government's commitment to negotiate trading arrangements that provide significant gains for Australian business

they are also a sign of our desire to increase Australia's economic links with the dynamic Asia-Pacific region.

The Government will continue to pursue favourable bilateral trade agreements where it makes sense to do so.

And returning to SAFTA, I am confident that over time, and with input from business and regular reviews such as today, the SAFTA agreement will play a major role in enabling the bilateral commercial relationship to reach its full potential.