15 Jan 2020
SINGAPORE: Revised and Extended New Zealand Free Trade Agreement Comes into Effect
The Agreement between New Zealand and Singapore on a Closer Economic Partnership (ANZSCEP) – an update to the existing Free Trade Agreement between the two countries – has now come into effect. The new treaty facilitates changes across a number of areas, including the trade in goods, Rules of Origin (ROO), the trade in services, sanitary and phytosanitary measures, technical barriers to trade, customs procedures, trade facilitation, investment, competition and consumer protection. Most significantly, it introduces measures related to two new sectors – e-commerce and regulatory cooperation.
In terms of the trade in goods, the updated FTA incorporates provisions related to both tariff and non-tariff barriers, including non-discriminatory treatment for remanufactured, repaired or altered goods. In addition, streamlined customs procedures and measures designed to reduce business costs have also been adopted.
According to Singapore’s Ministry of Trade and Industry (MTI), the updated FTA “incorporates some of the most flexible and trade facilitative ROO ever agreed to in a Singapore FTA.” These are said to include provisions that will make it easier for businesses qualify for preferential tariff treatment in a number of sectors, notably electronics, pharmaceuticals, chemicals and processed food.
In terms of the trade in services, both sides have agreed to mutually recognise professional qualifications in the field of accounting. This is intended to facilitate the movement of accounting professionals between the two countries.
As to the technical barriers to trade, a Mutual Recognition Agreement (MRA) on Conformity Assessment has been put in place. A number of related provisions from FTAs the countries are also a party to – most notably the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – have also been incorporated, including measures for enhancing the transparency of technical standards, promoting the use of international standards, recognising equivalent technical regulations and facilitating the acceptance of conformity assessments conducted within Singapore.
In the areas of customs procedures and trade enablement, the updated FTA includes provisions said to be more facilitative than the comparable provisions of the WTO’s Trade Facilitation Agreement (TFA). Most notably, both countries have agreed to release goods that reach their respective borders within 24 hours of arrival, while also committing to the release of express consignments within four hours of the submission of the relevant customs documentation – the shortest release times for goods and shipments ever agreed in any of Singapore’s FTAs.
In the field of investment, the new agreement provides enhanced protection to businesses in instances of arbitrary, discriminatory or abusive state action. It also contains a commitment to compensating investors in the event of state appropriation or any damage to their investments arising from armed conflict or civil unrest.
In terms of e-commerce, the two parties have agreed to allow companies to freely access data without having to locate IT facilities, such as servers, in either market. In addition, updated provisions related to logistics and e-invoicing have also been adopted.
Singapore is New Zealand’s largest trading partner in Southeast Asia. In 2018, trade between the two amounted to US$3.03 billion, a year-on-year increase of 12.1%. Singapore is also New Zealand’s sixth largest overseas investor, with total invested capital of US$2.88 billion as of the end of 2017.