Using trade deals to spur investment

SINGAPORE officials have been busy lately simultaneously negotiating in two mega-regional trade agreements. The first, the Trans-Pacific Partnership (TPP), brings together 12 members spanning the Pacific Ocean - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The second, the Regional Comprehensive Economic Partnership (RCEP), links up Asean members with dialogue partners Japan, South Korea, China, India, Australia and New Zealand.

In the run up to the TPP finish line, it is worth pausing to recall why officials pursue trade agreements in the first place.

First, agreements open markets for trade between member countries with better terms and conditions than non-members receive. In Singapore, the market for goods is already extremely open. But for companies attempting to export goods or services into some TPP member countries, barriers can still be high. These include formal blocks or impediments to trade as well as issues such as regulations or standards that make it tough for companies to move products across borders.