Australia, Singapore Trade Pact Revisions Take Effect
Australia and Singapore now have an updated version of their nearly fifteen-year-old trade pact in force, one year after their top trade officials signed a new amendment to the accord.
The original Australia-Singapore agreement entered into force in 2003, slashing goods tariffs between the two Asia-Pacific partners, along with undertaking a series of commitments in services trade, investment, telecommunications, intellectual property, and electronic commerce, among various other provisions.
Australian Trade Minister Steven Ciobo and Singaporean Trade Minister Lim Hng Kiang signed the updated accord nearly 14 months ago, with the latter official telling the Straits Times recently that “both sides have been working expeditiously to bring the agreement into force so that Australian and Singapore businesses can reap the enhanced benefits.”
The deal states that its updated objective are manifold, including both increasingly liberalised goods and services trade bilaterally, as well as backing “the wider liberalisation process in the Asia-Pacific Economic Cooperation consistent with its goals of free and open trade and investment; to build upon their commitments at the World Trade Organization, and to support its efforts to create a predictable, and more free and open global trading environment,” among other goals.
The changes include modernising the existing investor-state dispute settlement (ISDS) mechanism, such as by strengthening protections of a government’s right to regulate for public policy objectives. It also updates provisions for businesses to bid for public contracts, including making it easier for smaller firms to participate, and for the movement of business persons in the legal, engineering, accounting and financial sectors.
Australia has also raised its existing threshold for screening foreign investments from private actors in Singapore, specifically for non-sensitive sectors. Officials note that the increased threshold aligns the trade pact with other regional accords, including the Trans-Pacific Partnership (TPP), which includes both countries and has recently been renamed and seen some provisions put on hold.
According to Singapore government statistics, bilateral trade with Australia reached US$18.2 billion last year. Australia was Singapore’s thirteenth largest trading partner in 2016, while Singapore was Australia’s seventh largest trading partner that year. Foreign investment flows between them already amount in the hundreds of billions of dollars.
Along with their bilateral accord entering into force, the new year is set to see continued talks to finalise a few remaining sticking points in the TPP, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). (See Bridges Weekly, 16 November 2017)
Those efforts are expected to resume in the first quarter of the new year, as talks also continue on a separate initiative that also involves Singapore and Australia, the Regional Comprehensive Economic Partnership (RCEP). That planned accord involves all 10 members of the Association of Southeast Asian Nations (ASEAN), a group which includes Singapore, as well as ASEAN’s six FTA partners, among them Australia.
Officials confirmed last month that the RCEP talks will need to continue in 2018 as well, despite earlier hopes that a deal among the 16-country coalition could be clinched before year’s end. (See Bridges Weekly, 16 November 2017)
Meanwhile, trade talks between the EU and Japan to wrap up an accord continue underway, and may continue in the new year as the two trading giants weigh a few final sensitive areas, including how to deal with investor protections and how to treat investment disputes in a final agreement. (See Bridges Weekly, 21 September 2017)
ICTSD reporting; “Upgraded Singapore-Australia free trade agreement ratified, comes into force today,” STRAITS TIMES, 1 December 2017.