Singapore, Australia ink bilateral FTA deal.
Singapore and Australia signed Monday a bilateral free-trade agreement (FTA) that they expect to be implemented by the middle of the year.
The signing of the Singapore-Australia Free Trade Agreement (SAFTA) by Singapore Trade Minister George Yeo and Australian Trade Minister Mark Vaile concludes 10 rounds of negotiations held over the last two years.
It is the second bilateral FTA for Australia since it forged a ''Closer Economic Relations'' agreement with New Zealand 20 years ago.
For Singapore, it is the third bilateral FTA to be signed following the first such deal with New Zealand in 2000 and the second with Japan last year. Last year Singapore also signed a free-trade pact with the European Free Trade Association, which groups Switzerland, Iceland, Liechtenstein and Norway.
Both ministers said they expect the bilateral FTA to be extended to include the United States so as to form a triangular FTA.
Vaile said he expects Australia to conclude a bilateral FTA with the U.S. probably sometime in 2004.
The wide-ranging and comprehensive agreement includes tariff-free access for goods between the two countries, which enjoyed about S$9.9 billion (about US$5.66 billion) worth of bilateral trade in 2002.
''We expect this figure to grow in the coming years as the FTA brings greater market access opportunities and cost savings from tariff reduction,'' Yeo said after the signing ceremony at a Singapore hotel.
The pact will also ''enhance business opportunities in both countries and stimulate greater two-way investment,'' he said.
Vaile said the agreement is ''not going to be static and there will be continual inputs and reviews.''
The pact will also offer improved market access for services in areas including telecommunications, financial services and professional services, and cooperation in e-commerce, standards, education, intellectual property protection, competition policy and customs procedures.
Singapore, which currently faces tariffs of up to 25% for its exports to Australia, says zero tariffs will help it save about S$31.6 million a year.
Some of the key benefits for Australia include easing restrictions on Australian banks participating in Singapore's partly protected financial market.
Another highlight of the agreement is in the legal arena where Singapore has agreed to make it easier for Australian law firms to form joint ventures with local partners to practice in the city state, which puts restrictions on foreign lawyers operating in it.
Singaporeans will be allowed to practice law in Australia while Singapore also agreed to recognize more Australian law school qualifications for practice in Singapore.
Unlike the free-trade pact Singapore recently concluded with the U.S., which has yet to be signed, the Australia-Singapore pact has no provision for extending benefits to the neighboring Indonesian islands of Batam and Bintan.
''Australia is not yet prepared to include such a provision in the bilateral agreement, but it is something that we hope can be included in the future,'' Yeo said.
The FTA will be tabled before Australia's parliament for consideration before entering into force.