The Singapore-Australia Free Trade Agreement (SAFTA) is a central pillar of the economic relationship with Singapore, Australia's largest trade and investment partner in Southeast Asia.
This bilateral trade agreement came into effect in 2003 and has undergone multiple iterations (2006, 2007, 2011, 2017, and 2020) in order to adapt to the changing economic environment between the two countries and rectify some discrepancies to ensure that businesses and individuals were given fair treatment.
A few highlights of SAFTA
- The FTA ensures the elimination of all tariffs between Australia and Singapore.
- The number of Australian law degrees recognized in Singapore will double from four to eight.
- Residency requirement for Australian professionals will be either removed or eased.
- Agreement to facilitate paperless trading to reduce business transaction costs.
- Rules of Origin will be applied more effectively as each country has agreed to have a designated body to issue certificates of origin.
How does the SAFTA benefit you?
Through the establishment of mutual recognition arrangements (MRAs), Australian professionals such as architects, engineers, accountants, and auditors will be able to gain more recognition for their qualifications than in the past. Companies providing cross-border financial services will soon be able to include investment advice, portfolio management, and brokerage services for insurance.
Both Singapore and Australia have agreed to give full national treatment to service providers and to completely remove quantitative and other market access restrictions. This will allow for a much less restrictive and more transparent market for service suppliers.
For Financial Services, the Singaporean market has slowly been liberalizing in areas such as banking licenses, insurance, and the securities market. Regarding legal services, the requirements to set up a joint venture will be eased, allowing them to compete with the larger international law firms. Finally, for Environmental Services; Singapore has given market access to Australian business with the exception of wastewater and hazardous waste.
As for other service industry sectors, full market access and national treatment has been given to exporters such as construction, sporting, computer and related services.
Government Procurement
Singapore and Australia have agreed to non-discriminatory national treatment of a specified list of government businesses.
Australia gains access to such treatment in procurement by 47 Singapore ministries, agencies and statutory authorities as listed in the WTO Government Procurement Agreement (GPA), to which Australia is not a party. Australia's access is not constrained by Singapore's GPA restrictions on thresholds and coverage of products and services.
The two governments also commit to protecting intellectual property and confidential information supplied in tender processes.
The FTA also includes exemptions for procurement policies in relation to industry development, including measures to assist small and medium enterprises (SMEs) and in relation to promoting employment and training opportunities for indigenous people.
Australian Businesspeople
The initial period of stay granted to Australian businesspeople and professionals visiting Singapore to negotiate the sale of goods or services, establish an investment, or fulfil a short-term contract for their company, will increase from 1 month to 3 months.
Long-term business residents working for Australian companies in Singapore will be granted an initial period of 2 years, extendable on application up to at least 14 years. Conditions for spouses of long-term business residents in Singapore who wish to pursue careers will be more secure: spouses will be guaranteed the right to work in managerial, specialist and professional occupations and in office administration.
Singapore and Australia have strong relations. The increased market access and provision of a more open and predictable business environment of the SAFTA, ease the landing of Australian businesses into Singapore and vice versa.
Our professionals can help identify potential opportunities for you in the SAFTA, contact us via the form below or at info@fidinamgw.com for more information.
