[asia-apec 1664] Push for open-door deal with Singapore (Sydney Morning Herald)

[APEC Monitoring Group]

Sydney Morning Herald, 16/11/00
Push for open-door deal with Singapore 
By Tom Allard in Brunei and Sherrill Nixon



The free movement of citizens between Singapore and Australia, including automatic residency, is on the agenda after the countries yesterday announced they would begin formal negotiations to secure a free trade agreement.

A successful conclusion to the deal within a year, as envisaged, will represent only Australia's second such treaty with a nation after New Zealand.

The Prime Minister, Mr Howard, said the aim was to "put everything in the agreement" and a senior trade official confirmed later that "everything meant everything", including the movement of citizens and residency arrangements.

"We see it as an ambitious attempt to open trade between two countries that are very close economically, politically and socially," Mr Howard said.

Australia's decision to follow the bilateral trade route with Singapore reflects a strategic shift in trade policy away from reliance on forums such as the World Trade Organisation and APEC.

It is also indicative of the stalled global free trade movement after the collapse of the Seattle WTO round amid wild street protests.

Until this year, Australia has been lukewarm, at best, about bilateral trade agreements, arguing that they could distract from the main game - a new WTO round of global trade liberalisation. Previous overtures from Singapore had not been taken up.

Leaders at the APEC meeting in Brunei are struggling to find common ground over the launch of a new WTO round of trade talks next year, or to make any real progress toward APEC's free trade and investment goal of 2010 for developed countries and 2020 for all 21 APEC nations.

Mr Howard said the planned free trade agreement with Singapore "adds to the momentum [of APEC] but it also provides insurance" .

The merchandise trade with Singapore has few barriers so it is in the area of services that Australia hopes to make strides.

Singapore's Prime Minister, Mr Goh Chok Tong, envisaged that Australian companies would be able to tender freely for government contracts worth more than $100,000 and that opportunities would open up for architects, lawyers and accountants.

Mr Goh said a tripartite grouping of nations including New Zealand, which signed a free trade deal with Singapore this week, was possible. "I hope we can extend to a few other countries as well."

He was referring to the Pacific5 group of trading nations (P5), involving the US and Chile, an idea that has been floated for at least two years. 

Mr Howard met Chile's President Ricardo Lagos yesterday morning and an earlier meeting between the Minister for Trade, Mr Vaile, and his US counterpart, Ms Charlene Barshefsky, in Brunei canvassed a feasibility study on the P5 idea.


While free movement of citizens and automatic residency will be on the agenda for the Singapore pact, a shared welfare arrangement is unlikely.

Singapore is Australia's 7th largest trade partner. Exports to Singapore were worth $4.9 billion in 1999-2000 while imports totalled $4.4 billion, giving Australia a trade surplus of $499 million.

Gold and oil sales make up the bulk of Australia's exports to Singapore, with meat ranked third. Principal imports were computers, boats and floating oil rigs and telecommunications equipment in 1999-2000.

It sends more students (almost 18,000) to Australia than any other country.

New Zealand, with which Australia has a common market, signed its trade deal with Singapore this week. A trade bloc between the three countries and Chile and, eventually, the US, known as the Pacific 5 group, is being discussed at APEC.