Magazine article Business Asia

Singapore/Australia FTA: A Closer Look

Magazine article Business Asia

Singapore/Australia FTA: A Closer Look

Article excerpt

As trade barriers crumble and market liberalisation takes shape in the region, Australia stands at the forefront to grasp the opportunities created by a natural evolution of the new economy.

Singapore and Australia have entered an historic free trade agreement (FTA) that will pave the way for increased trade and investment, enhanced professional, financial, telecommunications and other services, and for greater intellectual property protection. SAFTA is the first bilateral trade agreement for Australia in almost 20 years, since New Zealand in 1983.

For Singapore, it comes hot on the heels of the FTAs Singapore has concluded with New Zealand, Japan and the European Free Trade Association, as well as commencing discussions with the United States in recent months.

The FTA will benefit not only the economy of the participating countries but also many business sectors, particularly Australia's service industry.

Benefits

The agreement will cover tariff free access for goods, improved market access for services (particularly telecommunications, financial services and professional services), and cooperation in areas such as e-commerce, education and customs procedures.

The benefits of FTAs on the member countries and the people, in terms of more trade and investment and employment opportunities, have been clearly demonstrated.

For example, under the North American Free Trade Agreement (NAFTA), which comprises the US, Canada and Mexico, Canada experienced:

* merchandise trade with the US soaring 80 per cent in the first five years of NAFTA, reaching $475 billion in 1998. Canada's merchandise trade with Mexico doubled over the same period to $9 billion; exports to the US and Mexico jumping 80 per cent and 65 per cent to $271.5 billion and $1. …

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