 
 RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/REG158/M/1 
19 November 2004 
 
 (04-5044) 
Committee on Regional Trade Agreements 
Thirty-Seventh Session  
 
 
 
FREE TRADE AGREEMENT BETWEEN AUSTRALIA AND SINGAPORE 
 
Note on the Meeting of 8 October 2004  
 
Chairman: Mr. R. Saborío (Costa Rica) 
  
1. The meeting was convened in document WTO/AIR/2393 
2. Under Agenda Item B.XIII of its Thirty-S eventh Session, the Committee on Regional Trade 
Agreements (hereinafter CRTA or the Committee)  took up the examination of the goods and services 
aspects of the Free Trade Agreement (FTA) between Australia and Singapore.  The following topics 
were discussed: 
 A. General Remarks 
Goods aspects
: 
 B. Trade Provisions 
 C. General Provisions of the Agreement 
  Services aspects
: 
 D. Provisions Affecting Trade in Services 
 
3. The Chairman  said that this was the first round of examination of the FTA between Australia 
and Singapore.  The Agreement had been signed on 17 February 2003 and had entered into force on 
28 July 2003.  It had been notified to the WTO on 1 October 2003 as document with double symbol WT/REG158/N/1 – S/C/N/233.  The text of th e Agreement could be found in document 
WT/REG158/1.  He proposed to organize the examination by first asking the Parties and other Members for general comments, and then to turn to  the specifics of the Agreement looking first at the 
goods aspects, followed by the services aspects, using the respective Standard Formats 
(WT/REG158/3) and (WT/REG158/4) to guide the debate. 
A. 
GENERAL REMARKS  
4. The representative of Singapore , speaking also on behalf of Australia, said that the Singapore 
– Australia Free Trade Agreement (SAFTA) had been conceived with the aim to enhance the already 
excellent bilateral relationships between Singapore and Australia;  promote economic growth for both 
Parties;  contribute to the wider liberalization in  Asia-Pacific Economic Co-operation (APEC);  and 
complement the WTO efforts to create a more predic table, freer and open global trade environment.  
He stated that the SAFTA was a comprehensive FT A, which was in conformity with GATT Article 
XXIV and GATS Article V, and which built on the f undamental principles of the multilateral trading 
system such as national treatment and transparency.  WT/REG158/M/1 
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 5. He proceeded to highlight some of the goods components of the SAFTA, and reiterated that 
the Parties considered these to be fully consiste nt with GATT Article XXIV:8(b).  Customs duties on 
all goods originating in either Part y had been abolished on the SAFTA's entry into force.  Both Parties 
had also undertaken not to adopt or maintain any import and export prohibition or restriction, except 
in accordance with their respectiv e WTO rights and obligations.  To facilitate trade between them, the 
Parties had agreed to fairly simple rules of origin:  wholly manufactured or obtained goods would 
enjoy the zero tariff benefit;  partly manufactured goods would also enjoy zero tariff if they met the 
value added threshold of 30 per cent for goods listed in Annex 2D, or  50 per cent for all other goods.  
He pointed out that the Parties had agreed not to impose safeguard measures on goods originating 
from the other Party.  SAFTA provided WTO-plus preferential treatment to the Parties to the 
Agreement as provided for under GATT Article XXIV .  In doing so, SAFTA did not increase barriers 
to third parties, as the Parties were excluded fro m all stages of the safeguard investigation and 
implementation.  The SAFTA also contained anti-dum ping provisions which were tighter than those 
found in the WTO.  For instance, with respect to the imposition of antidumping duties the lesser duty rule would apply.  The SAFTA prohibited expor t subsidies on all goods including agricultural 
products and in that respect the Agreement we nt beyond what had been achieved at the WTO. 
6. The representative of Singapore
 continued by  highlighting some of the more pertinent 
services components in SAFTA, which were also consider ed by the Parties to be fully consistent with 
the provisions of GATS Article V.  The SAFTA ga ve benefits to "natural" persons and "legal" 
persons of the other Party and services supplied by  them; and it provided for legal persons of a non-
Party to benefit from the Agreement if they engage d in substantive business operations in the territory 
of the other Party.  One GATS-plus feature of  the SAFTA was that both Australia and Singapore 
committed to take no safeguard action or initiate or  continue any safeguard investigation against 
services and service suppliers of the other Party.  With regard to commercial presence, the SAFTA went beyond the GATS by including elements such as the subrogation clause and the investor-state 
dispute settlement mechanism.  These provisions were  contained in the Investment Chapter of the 
SAFTA which sets out a framework of rules to pr omote and protect bilateral investments.  In 
accordance with GATS Article V:1, the SAFTA en sured a comprehensive coverage of services 
sectors, as well as all modes of supply.  The Serv ices Chapter of SAFTA was based on a negative list 
approach; in other words, unless a particular sect or was excluded it was deemed to be committed.  
SAFTA incorporated fundamental GATS disciplines  such as market access, national treatment and 
domestic regulation.  SAFTA also encouraged professionals in both countries to work towards 
achieving mutual recognition of professional qualifica tions and registration procedures.  The Chapter 
on the cross-border movement of business persons he lped to enhance trade and investment flows 
between Australia and Singapore:  business visitors  and intra-corporate transferees benefited from 
guaranteed entry and stay in Australia and stre amlined immigration clearance procedures.  The 
SAFTA was a dynamic Agreement providing for peri odic reviews; he remarked that at the first 
SAFTA review in July 2004, both Parties agreed  on various further steps towards greater trade 
liberalization among themselves.  On a general not e, he reiterated the Parties' support for the 
multilateral trading system and their belief that bilateral trade agreements that were both WTO-
consistent and WTO-plus could be  positive building blocks to globa l trade liberalization.  Trade 
liberalization at the global, regi onal and bilateral levels would he lp increase economic growth and 
create wealth and employment for their people. 
7. The representative of Australia
 welcomed the Committee's examination of the SAFTA.  She 
remarked that this was only the second FTA that Australia had entered into and that underscored the 
importance that Australia placed on their trading rela tionship with Singapore.  She said that Australia 
was fully committed to the WTO and to the multilate ral trade architecture and accordingly they placed 
a very high priority in ensuring that their FTAs we re consistent with WTO rules, supportive of WTO 
objectives and, where possible, WTO-plus.  Her delegation was proud of the many WTO-plus features 
contained in the SAFTA and she proceeded to recap  the most important ones:  SAFTA included duty-
free access for 100 per cent of tariff lines with  no phasing periods on implementation of the  WT/REG158/M/1 
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 agreement;  it liberalized services on the basis of a negative list approach;  it included simplified and 
liberalizing rules of origin;  it addressed competition policy, investments and government procurement;  and it included an immediate prohi bition on export subsidies on all goods including 
agriculture. 
8. The Chairman
, recalled that the terms of reference for the examination of the goods aspects 
had been adopted on 26 November 2003 by the Counc il for Trade in Goods, as contained in document 
WT/REG158/2. 
B. GOODS ASPECTS – TRADE PROVISIONS  
9. The representative of Japan , with respect to safeguards, sought confirmation that in the event 
of a global safeguard measure, the Parties woul d be exempted from both the investigation and 
application of such measure.  Additionally, he w as interested in knowing whether there was any other 
provision in the Agreement with regard to the a pplication of safeguard measures.  The representative 
of Australia  confirmed that investigation, implementa tion and processes concerning safeguards would 
not include the Parties to the Agreement. 
10. The representative of the United States  recalled the Parties stating in their introductory 
statements that the Agreement provided for the app lication of the lesser-duty rule on antidumping.  
However, he remarked that according to Article 8(2)b such application did not appear to be 
mandatory and sought confirmation as to whether th at was the case for Aust ralia.  Under the same 
heading, the representative of  the European Communities  asked the Parties whether the Agreement's 
WTO-plus aspects on anti-dumping, referred to by the Parties in their introductory statements, 
entailed changes in domestic laws relating to an ti-dumping, and if so, whether the improvements 
would be applied also to antidumping investigati ons involving non-Parties.  The representative of 
Australia  confirmed that the application of the l esser-duty rule was not mandatory; she added, 
however, that Australia would always apply it.  She said that the other questions would be replied to 
in writing. 
11. The representative of the United States , with respect to customs procedures, asked the Parties 
to describe the changes undertaken by their respec tive customs administrations to implement customs 
simplification procedures and, if possible, to provide an update of what had been done in that regard.  
The representative of Singapore  indicated that their respective cu stoms administrations were working 
to simplify procedures and establishing best practices.   She indicated that one area where work was 
currently being undertaken was with respect  to the application of paperless trading. 
12. With respect to government procurement,  the representative of the United States , was 
interested in knowing how the provisions on govern ment procurement in the Agreement went beyond 
the obligations of the WTO Agreement on Gove rnment Procurement (GPA).  Under the same 
heading, the representative of the European Communities  asked the Parties whether there were any 
categories of services excluded from the scope of procurement covered by the Agreement; he also asked whether the Agreement applied to procurement irrespectively of the contract value, to include 
small value contracts, or was there a threshold ab ove which the Agreement applied.  Furthermore, 
noting that the scope of procurement covered by the Agreement appeared to be broader than the scope 
of Singapore's procurement committed under the GP A, he wondered whether Singapore would be 
ready to negotiate an expanded coverage vis-à-vis Par ties to the GPA.  Finally, given the similarity of 
rules governing the procurement Chapter in the Agre ement with the rules contained in the GPA, as 
well as its ambition in terms of coverage, he w as interested in knowing whether Australia was 
considering joining the GPA.  The representative of Australia
 said that her country had no plans at 
that moment to join the GPA, since in their vi ew the GPA did not encourage open and transparent 
systems of government procurement and it had a number of flaws including that it departed from the MFN principle, it allowed bilateral agreement, it enabled cave outs  and it established prescriptive WT/REG158/M/1 
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 procedural requirements that were at odds with so me of their federal state and territory practices and 
policies.  As for the other questions, she said that they would be replied in more detail in writing. 
C. 
GOODS ASPECTS – GENERAL PROVISIONS OF THE AGREEMENT  
13. The representative of China  asked the Parties whether they could explain the difference 
between accession and association as provided in the Agreement. Given the differences between 
FTAs and customs unions, it appeared to him that association agreement did not imply a single RTA 
between SAFTA as a single party and the associated partner as another party.  The representative of 
Australia  said that they would provide a detailed response in writing. 
14. The Chairman  said that the first round of examination of the goods aspects of the FTA 
between Australia and Singapore had allowed the Co mmittee to clarify some questions. A number of 
issues remained pending.  He asked delegations wish ing to submit written questions to forward them 
to the Secretariat by 29 October 2004 and for the Par ties to submit written replies by not later than 3 
December 2004.  The examination of the goods aspect s of the Agreement would continue at a future 
Session of the Committee. 
15. Moving to the services aspects of the Agreemen t, the Chairman reminded the Committee that 
the decision to refer the SAFTA for examination to the CRTA had been taken on 5 December 2003 by 
the Council for Trade in Services, as contained in document S/C/M/69. 
D. SERVICES ASPECTS – PROVISIONS AFFECTING TRADE IN SERVICES  
16. The representative of Chile,  noting that the Annexes to the Agreement were not part of the 
documents that had been circulated for that day's meeting, asked the Parties whether they could point 
out the sectors that were excluded from the cove rage of the Agreement since that would save 
interested Members from having to look them up on the Parties' government websites.  The 
representative of Australia  said that the negative list approach on services liberalization employed in 
the Agreement provided an indication of what was not covered.  She added that the Annexes to the 
Agreement were available on both the Aust ralia and Singapore governments websites. 
17. The representative of the European Communities  noted that the Parties had undertaken GATS 
commitments covering measures taken by any leve l of government; however, in SAFTA, they had 
excluded from their market access and national treatm ent commitments measures at local level.  He 
was wondering whether there was a particular reason for such exclusion and whether there was not a 
risk that discrimination between the Parties might be introduced by a simple process of 
decentralisation.  The representative of Australia  said that the SAFTA did not exclude local 
governments from services and investment commitmen ts.  She indicated that the definition of 
"measures by parties" in Article 1(h)(i) of Chapte r 7 on Trade in Services was clear in stating that 
such measures included measures taken by central, re gional or local governments and authorities.  She 
added that in relation to the list of reservations, Article 5.1 of Chapter 7 (Trade in Services) and 
Article 5.1 of Chapter 8 (Investme nt) provided that any existing non- conforming measures at the local 
level might be maintained under the standstill commitm ent of Annex I without the need to specifically 
list such measures in the Annex. 
18. The representative of the European Communities , referring to Article 23 (recognition) of 
Chapter 7, asked the Parties whether the autonomous  recognition and the negotiations foreseen in that 
provision bound the Parties under international law and whether it was the intention of the Parties to 
comply with obligations imposed by Article VII of GATS in implementing that provision.  The 
representative of Australia  pointed out that Article 23 was not prescriptive about the status of any 
agreement or arrangement that might  be reached as a result of the negotiations between the relevant 
competent bodies.  She said that the appropriate nature  and status of such agreements would need to  WT/REG158/M/1 
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 be determined on a case by case basis.  Furthermor e, there was nothing in Article 23 which would 
interfere with the ability of the Parties to fully adhe re to the provisions of Article VII of GATS.  In 
that respect she pointed out that Australia had been a strong supporter of the work in the WTO 
relating to Article VII, including the notification provisions, and that they intended to fully comply with those provisions. 
19. The representative of the European Communities
 noted that Annex 4-III of SAFTA contained 
provisions relating to autonomous recognition of la w degrees for admission as qualified lawyers.  He 
was interested in knowing whether similar provision s existed in Singapore for law degrees of third 
parties.  The representative of Singapore  replied that Singapore did recognize law degrees from 
certain common law jurisdictions and that they wo uld be happy to provide the European Communities 
with the list of recognized law degrees. 
20. The Chairman  said that the first round of examin ation of the services aspects of the FTA 
between Australia and Singapore had allowed the Co mmittee to clarify some questions.  However, a 
number of issues remained pending.  He asked de legations wishing to su bmit written questions to 
forward them to the Secretariat by 29 October 2004 a nd for the Parties to submit written replies by not 
later than 3 December 2004.  The examination of the services aspects of the Agreement would 
continue at a future Session of the Committee. 
21. The Committee took note  of the comments made. 
 
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