Australia, Singapore Set to Upgrade Trade Deal
Australia and Singapore have agreed on a series of steps to build on their 2003 trade deal, officials announced earlier this month. The measures are in the context of the Comprehensive Strategic Partnership (CSP) work underway between the two sides, which also involves steps to boost defence cooperation.
The announcement follows up on an earlier joint declaration from 2015 on the CSP between the two countries, which committed both governments to take a series of steps to build on their economic, trade, and defence ties.
“The foundations of the Australia-Singapore partnership are our shared strategic perspective and complementary economies,” said the joint announcement confirming the news. “We share interests in the political stability and economic prosperity of our region, and have worked together as like-minded partners to foster those interests.”
Bilateral goods trade between Australia and Singapore was worth A$28.5 billion (€18.4 billion at current exchange rates) in 2014-2015, and Singapore is Australia’s fifth largest trading partner.
“[The agreement] is a win-win deal that will cement relations and benefit Australians and Singaporeans for years to come. The Comprehensive Strategic Partnership is an ambitious package covering many aspects of our relationship,” said Singaporean Prime Minister Lee Hsien Loong, via a statement released by the country’s foreign affairs ministry.
The Singaporean premier also noted that while both sides will “move quickly” to bring the planned changes into effect, some may take longer than others.
“This is a very important deepening of the relationship with Singapore…and this would be seen around the region, I believe, as a natural development,” said Australian Prime Minister Malcolm Turnbull.
Trade deal review
Part of the CSP process between the two Pacific economies included a “Third Review” of the Singapore-Australia Free Trade Agreement, otherwise known as SAFTA. The existing agreement has been in force for 13 years.
Among the changes agreed this month were updated goods, services, and investment rules; changes in government procurement market access; a commitment to start talks for mutual recognition of professional qualification; and updated rules of origin.
Given that both countries are among the 12 signatories to the Trans-Pacific Partnership (TPP) Agreement, they have also pledged to bring in the annexes to that deal’s chapter on technical barriers to trade, specifically relating to medical devices and medicines; cosmetics; and wine and distilled spirits.
“Through this agreement we’ve put a focus on collaboration, on defence, on trade, on innovation,” said Australian Trade Minister Steve Ciobo in an interview with Australia’s ABC News. “It’s consistent with this Government’s focus on making sure that we have a national economic plan that drives the economy, that drives jobs, and that also helps to effectively manage the transition in our economy away from resources and energy.”
These changes will still require some technical work going forward, after which they will undergo a legal scrub and be subject to each country’s domestic approval procedures.
Additional Australian deals on the horizon?
Australia is also in the process of pursuing a series of trade deals with other economies. These include, for example, negotiations with India to advance the Comprehensive Economic Cooperation Agreement (CECA). (See Bridges Weekly, 7 April 2016)
The upcoming 2 July election in Australia has been credited by some officials – including former trade minister Andrew Robb – as complicating the timing for finalising the bilateral talks with New Delhi. The talks have been underway since 2011, with former Prime Minister Tony Abbott suggesting the deal could be done in 2015. (See Bridges Weekly, 20 November 2014)
“If we both put the focus to it now we are literally two months away from a deal,” said Robb in comments to the Australian Financial Review.
In the lead-up to the polls, however, officials from the current government have also touted the Liberal Party’s track record on trade, given the conclusion and entry into force in recent years of deals with Japan, China, and South Korea.
“The Turnbull Government continues to pursue an ambitious trade agenda to create jobs and drive economic growth,” said the country’s trade ministry in a media release, noting in particular the advances made since Turnbull took over from Abbott, also of the Liberal Party. (See Bridges Weekly, 17 September 2015)
Preparations have also been underway for starting trade talks between Australia and the EU. (See Bridges Weekly, 7 April 2016) The EU is currently Australia’s third largest trade partner, with bilateral goods trade topping €41 billion annually.
Agriculture is expected to be a tricky area to navigate in those negotiations as well. Australian farmers have expressed interest in better market access to the European market. EU negotiators, however, have called for a deal that takes “agricultural sensitivities” into account, given the needs of their own farm sector. (See Bridges Weekly, 15 October 2015)
ICTSD reporting; “Australia-India trade deal: ‘the opportunity is still there, says Robb,” FINANCIAL REVIEW, 16 May 2016; “Australia seals trade expansion and $2.25b defence deal with Singapore,” THE SYDNEY MORNING HERALD, 6 May 2016; “Farmers, luxury cars sticking points in EU trade deal,” FINANCIAL REVIEW, 25 April 2016; “Major Australian-Singapore trade deal announced,” SBS AUSTRALIA, 6 May 2016; “Singapore, Australia deepen comprehensive strategic partnership with new deal,” THE DIPLOMAT, 10 May 2016.