SINGAPORE, May 18, 2019, TODAY. In light of the trade tensions between the United States and China, free trade agreements, such as those between Singapore and New Zealand, are necessary to demonstrate co-operation and promotion of economic integration between countries, Prime Minister Lee Hsien Loong said, reported the TODAY.
Mr Lee made these remarks on Friday (May 17) during a joint press conference at the Istana with New Zealand Prime Minister Jacinda Ardern, who is on her first official state visit to Singapore.
Mr Lee and Ms Ardern had signed a joint declaration elevating both countries’ relations to an Enhanced Partnership, which will boost collaboration in the areas of trade and economy; security and defence; science and innovation; and people-to-people links.
Responding to questions by the media on how much the Enhanced Partnership would mitigate slowing economic growth in Singapore and New Zealand, Mr Lee said: “Trade frictions between the major powers will be significant for (Singapore and New Zealand) because we are small and open, and we are heavily dependent on natural trade, and we both rely on free trade as well as a rules-based international order.”
He added that while the Enhanced Partnership was quantitatively “modest” in terms of economic contributions to New Zealand and Singapore’s financial trade, it demonstrated that both countries were co-operating and promoting economic integration at a time when basic concepts about free trade are being questioned and coming under threat.
Mr Lee and Ms Ardern also witnessed the signing of five agreements, including an upgraded free trade agreement (FTA), known as the Agreement between New Zealand and Singapore on a Closer Economic Partnership (ANZSCEP).
Ms Ardern added that “it was now more important than ever” to demonstrate the benefits of free trade. She said that by continuing to modernise FTAs, such as in the case of Singapore and New Zealand, countries could ensure that their FTAs mirrored the changing environment they are working in and that businesses benefited.
The ANZSCEP, which has been in force since 2001, is significant for being Singapore’s first bilateral FTA and New Zealand’s second.
Singapore and New Zealand share strong trade and investment ties, with bilateral trade registering a 12.1 per cent year-on-year increase to S$4.1 billion last year. Singapore was also New Zealand’s sixth largest investor with about S$3.9 billion worth of investments as of end-2017.
WHAT THE EXPANDED FTA MEANS FOR COMPANIES
Two new chapters have been added to the agreement, including one which establishes a mechanism to enable companies to raise and resolve trade-related issues more quickly.
The other new chapter introduces the following provisions covering e-commerce:
Singapore companies will not be required to set up a computer database in New Zealand as a prerequisite to doing business there. Instead, they will be able to store data outside New Zealand and access data from anywhere else freely. The same applies to New Zealand companies operating in Singapore.
There will be greater protection for personal information. Mechanisms to facilitate trusted data flows and protect online consumers will also be put in place.
There will be greater co-operation in logistics and electronic invoicing regulations. For instance, both countries will work towards mutually recognising electronic invoicing systems.
Apart from the two new chapters, other existing chapters have been upgraded to help companies qualify more easily for preferential tariff treatment in sectors such as electronics, pharmaceuticals, chemicals and processed food. Reduced trade barriers will also allow food exporters here to benefit from improved market access to New Zealand.
Businesses may also see faster clearance of their exports. For instance, goods that reach each country’s respective borders will be released by customs within 24 hours of arrival.
These changes will come into effect after the agreement has been ratified by the respective countries’ governments.
In addition to the ANZSCEP, Mr Lee and Ms Ardern witnessed the signing of four other agreements aimed at enhancing co-operation between both countries.
The Cyber Security Agency of Singapore and the National Cyber Policy Office of New Zealand agreed on a formal arrangement to strengthen co-operation through the regular exchange of information on cyber-security incidents and threats.
There will be greater collaboration between both countries in the arts, with the National Arts Council Singapore and Creative New Zealand, the country’s national arts development agency, facilitating exchanges and skill development opportunities for arts professionals and organisations from both countries.
Singapore and New Zealand agreed on a two-year arrangement to facilitate the exchange of market knowledge and develop business networks in both countries.
There will be greater collaboration in the areas of science, technology and innovation under the Enhanced Partnership.
Ms Ardern, who attended a welcome ceremony and had an official lunch with Mr Lee at the Istana, also held a courtesy call with President Halimah Yacob.
In the afternoon, Ms Ardern took part in programmes organised by the New Zealand High Commission Singapore before leaving Singapore on the same day.