australia & sigapore open free trade links

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    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.

    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
    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.
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