Singapore-Australia Free Trade Agreement (SAFTA) - a business guide
Chapter 2: Why Singapore?
Singapore is an important hub for the South-East Asian region. It has a dynamic economy, with strong service and manufacturing sectors. Notwithstanding its small population (4.2 million), Singapore has one of the most developed economies in Asia (GDP per capita estimated at A$32,646 in 2003).
Singapore was ranked the best place to do business in the Asia Pacific region and was ranked seventh globally by the Economist Intelligence Unit in July 2003. It has excellent infrastructure, including an airport and seaport that are among the best in the world, an extensive road network and subway system, state-of-the-art telecommunications facilities and reliable public utilities.
Singapore is our largest trade and investment partner in ASEAN and our eighth- largest trading partner overall. In 2003, Australian merchandise exports to Singapore were A$3.5 billion (our eighth-largest export market) and our imports from Singapore were valued at A$4.5 billion (eighth-largest source). Major Australian exports were petroleum (crude and refined), non-monetary gold, meat, milk and cream, aircraft and parts, and food and live animals. Major imports from Singapore were refined petroleum, computers and parts, musical instruments, and integrated circuits.
Services are also a key part of our exports. In 2003, Australian exports of services to Singapore were A$2.1 billion, making Singapore our fifth-largest services export market. Education was a major component of this, with over 31,400 Singapore students enrolled in both onshore and offshore Australian educational institutions in 2003. Singapore is also our largest tourist market in Asia after Japan, with over 226,000 Singapore visitors to Australia during the year ended 30 June 2003. Two-way investment is also significant, with the level of Australian investment in Singapore recorded at around A$10.0 billion, and total Singaporean investment in Australia at over A$33.5 billion (as at 30 June 2003).
Australia and Singapore have similar views on a range of economic issues. Both are strong supporters of multilateral trade liberalisation through the World Trade Organization. Both are also looking to develop new economic links with countries within and outside the Asia Pacific region.
Apart from strong economic and trade relations, Singapore and Australia have maintained effective links in the areas of foreign relations, defence, tourism, education, police and immigration. There is significant cooperation in narcotics control, disarmament and arms control, counter-terrorism, law enforcement, information and communications technology and aviation.
Australian companies’ comments on Singapore
‘Due to its perfect infrastructure, we use Singapore as a regional base to cover other Asian markets and thus achieve better economies of scale for our office here.’
‘Don’t treat Singapore as an extension of Australia.’
‘To be successful here you need to be very patient and think long term.’
‘My advice would be to set up alliances with local companies to better access the market.’
‘Build your network and try to win the support of the local Ministries and Government agencies.’
‘It takes a lot of effort to keep up the contacts—we have consistently followed up for the past 12 months.’
(Source: Austrade Singapore)
Table of contents - Singapore-Australia Free Trade Agreement (SAFTA) - a business guide