Singapore-Australia Free Trade Agreement (SAFTA) - a business guide
Chapter 1: What is SAFTA?
The Australian Government recognises that bilateral free trade agreements (FTAs) can deliver market access gains to Australian industry and exporters faster than multilateral negotiations through the World Trade Organization (WTO). Prime Minister Howard, together with his Singapore counterpart, Prime Minister Goh Chok Tong, announced jointly at the APEC Leaders’ Meeting in November 2000 that Australia and Singapore would negotiate a bilateral free trade agreement. Ten full rounds of negotiations were held between April 2001 and October 2002.
The Singapore–Australia Free Trade Agreement or SAFTA was signed by the Australian Minister for Trade, Mr Mark Vaile, and Singapore Minister for Trade and Industry, BG George Yeo, in Singapore on 17 February 2003, and entered into force on 28 July 2003 following an exchange of diplomatic notes.
SAFTA is Australia’s first bilateral free trade agreement since the 1983 Closer Economic Relations Trade Agreement with New Zealand. It is a comprehensive agreement that is fully consistent with WTO rules. It secures for Australia outcomes that go deeper and further than the WTO in relation to trade in services, intellectual property, investment, and competition policy.
Key outcomes of SAFTA for Australia
SAFTA offers greater opportunities in the goods and services sectors to a wide range of Australian exporters, and further strengthens trade and investment links between Australia and Singapore.
SAFTA eliminates remaining Singapore tariffs and provides cheaper inputs for Australian businesses on a range of products. It guarantees liberal conditions of access for many service suppliers. Australian legal, financial and educational service exporters, for example, will benefit from outcomes on services that are more advanced than those in the WTO.
SAFTA also 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.
Summary of key outcome of SAFTA for Australia
- Elimination of all tariffs from entry into force, including on Australian beer and stout
- Comprehensive and transparent ‘negative listing’ of services commitments
- Restrictions on the number of wholesale banking licences to be eased over time
- Banks allowed to transfer information, including electronic data, to Australia
- Conditions eased on establishment of joint ventures involving Australian law firms
- Number of Australian law degrees recognised in Singapore doubled from four toeight
- Removal/easing of residency requirements for Australian professionals
- National treatment and market access commitments for Australian education providers
- Singapore government overseas scholarships 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 service sectors
- Transparency of investment restrictions in Singapore’s government-linked companies
- Investors protected against, and compensated for, expropriation
- Telecom interconnection on non-discriminatory, timely, cost-oriented terms
- Principles for telecoms regulation on transparency, rights of appeal, effective sanctions, and consultation with industry participants
- Australian firms get national treatment in procurement by 47 Singapore agencies
- Protection of intellectual property supplied in government tender processes
- Cooperation on eliminating trade in goods infringing intellectual property rights
- Short-term entry for Australian business people extended from one month to three months and long-term business entry of up to 14 years in total
- Rights to work for spouses of business people
- 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 businesses
- No customs duties on bilateral electronic transmissions
- Agreement to facilitate paperless trading to reduce business transaction costs
- Promotion of confidence in bilateral e-commerce, e.g. in electronic signatures
- Annexes on food standards and horticultural products to enter into force during the first half of 2004
- Cooperation on investigation and prevention of infringements of customs law
Table of contents - Singapore-Australia Free Trade Agreement (SAFTA) - a business guide