partnership handshake

Singapore and New Zealand begin New Decade with Enhanced Partnership

Confirming that there is still an appetite for free trade agreements in the wider Indo-Pacific region, the New Zealand-Singapore Enhanced Partnership entered into force on 1 January 2020.

The Enhanced Partnership agreement builds upon and extends the original NZ-Singapore Closer Economic Partnership (CEP), which was signed in 2000 and entered into force in 2001. The CEP was New Zealand’s second free trade agreement (after the 1983 Closer Economic Relations Agreement signed with Australia) and the first of its kind concluded by Singapore.

Comment

Continuing the theme of speedy NZ-Singapore negotiations, the Singapore Enhanced Partnership was concluded over the course of 2017 and 2018. Then, following a National Interest Analysis conducted by the NZ Ministry of Foreign Affairs and Trade (MFAT), it was signed in May 2019. As MFAT states, the purpose of the Enhanced Partnership is to ‘significantly lift our co-operation with Singapore in the areas of trade and economics; security and defence; science, technology and innovation; the arts; and people-to-people [links].’

An important aspect of the rationale behind the upgrade to the original CEP was the capacity of the expanded agreement to continue to advance New Zealand’s strategic interests as – like Singapore – an open, export-led economy. Given that tariff barriers between the two countries were eliminated in the 2000 CEP, increasing the access of local consumers to imported products – which is of particular interest to New Zealand primary and viticultural producers – and improving the ability of Singaporean and Kiwi businesspeople to work in each other’s countries, together constituted a primary focus.

Among the successful outcomes for the NZ negotiators were: streamlining the customs clearance and phytosanitary requirements for NZ goods arriving in Singapore; and the extension of visa-free access for business travellers from five to eight years. These measures should contribute to increased trade in goods and services between the two countries.

As New Zealand’s main trading partner in South-East Asia (and, at NZ$5.25 billion in two-way trade, the eighth-largest overall), Singapore is a small, but important, high-value market. As the balance of trade currently falls in Singapore’s favour, it is a market that holds plenty of scope for Kiwi exporters.

In the defence context, the initiatives contained in the Enhanced Partnership will become even more important in the future, as the prospects of instability in both South-East Asia and the South-West Pacific increase.

The Enhanced Partnership continues the long-standing practice of personnel from the Singapore Armed Forces (SAF) and New Zealand Defence Force (NZDF) training together, both bilaterally in such exercises as Thunder Warrior and multilaterally under the auspices of the Five Power Defence Arrangements.

The agreement is likely to see the SAF make greater use of NZ military facilities, particularly at such locations as the Army Training Area on the volcanic plateau of the central North Island and at the RNZAF Ohakea base, near Palmerston North. In addition to the obvious benefit of providing plenty of space, exercising at the NZ bases also has the advantage of exposing SAF personnel to a greater variety of landforms and environments than are encountered within the confines of the city-state.

Administratively, the relationship will be enhanced by plans for closer consultations at the annual Defence Ministers’ Meeting, supplemented by a new security and intelligence dialogue designed to address issues ranging from terrorism to cybersecurity.

The strategic intent of the Enhanced Partnership upgrade fed into all levels of the negotiations. The aim was to demonstrate the continued value of high-quality mutually-beneficial free trade agreements to small, export-focussed, economies with shared interests. If the past is any guide, the upgraded agreement will continue to demonstrate the benefits that can accrue from the international rules-based order.

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Article first published on 22 January 2020 Leighton G. Luke, Research Manager, Indo-Pacific Research Programme for Future Directions International. (2020). Singapore and New Zealand begin New Decade with Enhanced Partnership – Future Directions International. [online] Available at http://www.futuredirections.org.au/publication/singapore-and-new-zealand-begin-new-decade-with-enhanced-partnership/