australia & sigapore open free trade links

SINGAPORE, Feb 17 (Reuters) - Australia signed its first free
trade deal in 20 years on Monday, sealing a pact with Singapore
that provides tariff-free access to S$9.9 billion ($5.65 billion)
of trade.
The agreement gives Australia a foothold in Asia for its
banking, legal and educational service industries, while putting
Singapore businesses, which often include a large element of
government ownership, on a more even playing field.
"The objective of the FTA is to make Singapore the northern
extension of Australia into Asia," the city-state's trade
minister, George Yeo, said after signing the deal, which is
expected to become effective by the middle of the year.
Both Singapore and Australia already run open, market
economies with well-established legal systems, making tariff-free
entry of goods a small part of the overall deal.
Singapore estimates it will save only S$31.6 million from the
tariff concessions in the deal, based on its current trade level
of about S$2.6 billion.
But it took the countries over two years of negotiations to
get an agreement which answered each side's demands for access on
the fast-growing services sector.
The final document includes provisions to ease curbs on
wholesale banking licenses, allow mutual recognition between
architects and engineers and a doubling in the number of law
degrees recognised in Singapore to eight from four.
There is a whole section on telecom services, ensuring that
one of Singapore's largest investments in Australia, the S$13
billion purchase of Optus by Singapore Telecommunications Ltd
, is treated fairly in its dealings with the dominant
local carrier Telstra Corp .
The provision includes greater controls over the conduct of
Telstra, majority-owned by the Australian government, including a
deal to resolve interconnection disputes within six months.
Rules governing the origin of exports allow Singapore-made
goods to qualify for tariff-free status even if part of the
manufacturing is done elsewhere.

TRADE DEALS KEY
Singapore, which is struggling to emerge from its worst
recession since independence in 1965, faces huge challenges from
the rise of China and, to a lesser extent, India and has
identified free trade deals as key to secure its future.
It expects to sign a free trade deal with the United States
later this year and already has agreements with Japan, New
Zealand and the four-nation European Free Trade Area, which
includes Norway, Iceland, Switzerland and Liechtenstein.
Australia, in addition to its 20-year Closer Economic
Relations Agreement with New Zealand, is also exploring free
trade deals with Thailand and the United States.
Both Australia and Singapore are keen to paint their deal as
consistent with the World Trade Organisation's (WTO) Doha free
trade round.
"Our number one trade priority is a successful outcome of the
Doha trade negotiations," said Australian Trade Minister Mark
Vaile.
But Vaile added: "We're not prepared to walk at the pace of
the slowest common denominator, nor is Singapore."
"This is an opportunity to move a bit ahead and show others
what can be done," he said.
($1=S$1.75)