SINGAPORE - An upgraded free trade agreement between Asean, Australia and New Zealand will provide tangible benefits to Singapore businesses in areas such as e-commerce, investment, services, consumer protection and government procurement, said the Ministry of Trade and Industry (MTI) on Tuesday.

The deal was inked in the Indonesian city of Semarang on the sidelines of the 55th Asean Economic Ministers’ Meeting and the second Regional Comprehensive Economic Partnership Ministerial Meeting held from Sunday to Tuesday.

Permanent Secretary for Trade and Industry Gabriel Lim attended the meeting on behalf of Minister for Trade and Industry Gan Kim Yong.

MTI said the upgraded Asean-Australia-New Zealand Free Trade Area (AANZFTA) deal delivers forward-looking outcomes, going beyond Singapore and Asean’s free trade agreements, such as the strengthening of supply chain resilience for essential goods, simplified rules of origin, and a standalone chapter on trade and sustainable development.

It will also promote certainty in the supply of essential goods for businesses and consumers during future crises. Hence, AANZFTA countries will refrain from introducing restrictions on essential goods, and expedite movement, release and clearance of essential goods. They can request of one another essential goods that are in short supply during humanitarian crises, epidemics or pandemics.

“This helps business continuity as well as consumers who rely on the continued flows of essential products in their daily lives,” MTI said.

In addition, the upgraded deal will improve flexibility for businesses to tap preferential market access with simplified rules of origin – giving businesses more options to source materials and increasing their competitiveness.

Other key features of the upgraded AANZFTA deal include enhanced collaboration in the professional, education, telecommunications and financial services sectors; greater transparency and certainty for investors; and protection for businesses and consumers from anti-competitive activity when operating in the region.

MTI said the upgraded deal will also increase certainty in the regulatory environment through a new government procurement chapter, and support for micro, small and medium-sized enterprises.

Singapore companies lauded the AANZFTA upgrade and said such pacts have been vital in paving the way for shaping close business relationships and investment opportunities across the border.

Olam Food Ingredients (OFI), a unit of Olam Group, said its investment to develop a state-of-the-art dairy processing facility in New Zealand is a good example to show how trade agreements such as AANZFTA help.

“We believe it is important that agreements like the AANZFTA remain high quality and modern, and therefore welcome the upgrade and the enhancements it brings, particularly around rules of origin which will allow OFI to take advantage of more integrated regional supply chains,” said the company’s senior vice-president Naval Sabri.

Mr Adrian Chia, co-founder of Big Tiny, which specialises in designing, building and managing small houses, said that the business relies heavily on cooperation and trade between Singapore, Australia and New Zealand, and the focus of these upgrades to the AANZFTA will help to support its plans for growth in these markets.

The company launched its first tiny house collective in Australia, Tiny Away Escape@Grampians Edge, in 2022 and plans to launch a second tiny home community, Tiny Away Escape@Great Ocean Road.

“The importance of building strong business partnerships in the region and ensuring smooth movement of assets has never been greater for our business,” Mr Chia said.

Mr Pratik Gandhi, co-founder and chief operating officer at software firm Nium, said the upgraded AANZFTA deal provides the necessary rules and standards for efficient, safe and transparent digital-money movement across borders.

“It’s upon this foundational framework that Nium can deliver its modern payment infrastructure that will serve to accelerate regional commerce,” he said.

The agreement establishing the AANZFTA entered into force in 2010, establishing a free trade area of more than 710 million people with a combined gross domestic product of over US$4.5 trillion (S$6.1 trillion).

In 2022, merchandise trade between the two countries and Asean amounted to US$116 billion, up 24 per cent from 2021. Australia and New Zealand were Asean’s seventh-largest source of foreign direct investment in 2022, at US$2 billion, a rise of 430 per cent from 2021.