ASEAN member states, Australia and New Zealand have substantially concluded negotiations to upgrade a free trade agreement (FTA), which will include new features to ensure the continued flow of essential goods during times of crisis.
The new features will make it easier for businesses to operate in uncertain times, help them better plug into regional value chains, and promote a more conducive environment for businesses, said the Ministry of Trade and Industry (MTI) on Sunday (Nov 13).
Prime Minister Lee Hsien Loong, along with leaders and ministers, announced the conclusion of negotiations on Sunday at the sidelines of the 40th and 41st Asean Summit and Related Summits in Phnom Penh, Cambodia.
The Agreement Establishing the Asean-Australia-New Zealand Free Trade Area (AANZFTA) will benefit more Singapore-based companies through more facilitative rules regarding trade in goods, rules of origin, customs procedures, investment, and trade in services and e-commerce, said MTI.
The upgraded agreement, which has yet to be signed, includes new commitments on sterilisation to support bulk breaking operations, education services cooperation, and a standalone chapter on trade and sustainable development.
The AANZFTA effectively creates a free trade area of over 710 million people with a combined gross domestic product of more than US$4.5 trillion. Asean's total trade in goods with Australia and New Zealand was US$92.7 billion in 2021, an increase of 45 per cent from 2020. Australia and New Zealand's foreign direct investment into Asean was US$588.8 million, a rise of 86 per cent from 2020.
Minister for Trade and Industry Gan Kim Yong said that the substantially concluded negotiations demonstrated the importance that the parties placed on continued cooperation amid an increasingly challenging global economic environment.
"The upgraded AANZFTA seeks to address emerging issues and position the AANZFTA well to deal with future crises and challenges. This agreement's novel provisions on supply chain resilience for essential goods, sustainability, rules of origin and enhancements in areas such as e-commerce and services will further open up opportunities for our businesses, especially our small and medium enterprises, and our people," added Gan.