The Trans-Pacific Partnership (TPP) will go beyond boosting investment and trade to offer a range of other benefits to Singapore firms, said the Ministry of Trade and Industry (MTI), which has released more details about the potential impact of the trade deal.
These benefits include being able to bid for government contracts in other TPP countries, and the ability to take a larger stake in foreign firms operating in key sectors abroad.
The TPP is a far-reaching agreement involving 12 countries which make up 40 per cent of the world economy.
The deal was finally struck in Atlanta, the United States, last Monday after more than five years of intense negotiations. It must now be signed formally by the leaders of the 12 nations - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam - and ratified by their legislatures.
MTI said the benefits to Singapore fall into three main categories.
First, the TPP will offer comprehensive market access for Singapore exporters of goods and services. Notably, Singapore investors can expect to benefit from the removal of foreign equity restrictions in private healthcare, telecommunications, courier, energy and environmental services in Brunei, Malaysia and Vietnam.
The TPP will also enable Singapore companies in the IT, construction and consultancy sectors to bid for government procurement projects in markets such as Malaysia, Mexico and Vietnam, which were previously closed to foreign bidders.
Next, the TPP will reduce "behind-the-border", or non-tariff, regulatory barriers to ease the flow of trade and investment. This means countries will be required to make Customs laws, regulations and procedures more transparent, and also tackle hidden costs impeding business operations, like corruption.
Lastly, the TPP addresses emerging concerns faced by businesses and consumers, such as intellectual property and the growth of the digital economy.
CIMB Private Bank economist Song Seng Wun said the direct economic impact of the TPP on Singapore might be limited given that it already has existing free-trade agreements with all the countries involved except Canada and Mexico.
But companies here will enjoy indirect benefits when the economies of other TPP countries get a lift from the deal, he noted. The TPP is also more comprehensive and in-depth than Singapore's existing bilateral agreements.
Still, Mr Song pointed out that the trade pact is years away from entering into force, and while the provisions "look good on paper", effective implementation could be tricky.
For instance, while the TPP will lift curbs on foreign ownership of companies in private healthcare, energy and telecommunications in Brunei, Malaysia and Vietnam, these industries tend to be dominated by domestic incumbents.
"Local incumbents usually have a stranglehold and it's tough for new players to come in, which is probably why countries are more willing to open up the playing field in these sectors," he noted.
"Still, at least the opportunities will be there for Singapore companies."
The TPP will enter into force once at least six original signatories, accounting for at least 85 per cent of economic activity across the TPP countries, have ratified the agreement.
This is by no means certain, with national elections coming up in Canada and the US - and the TPP being seen as a lightning rod issue.
In Singapore, the TPP will be ratified once it is approved by the Cabinet, and any legislative changes that may be required are passed in Parliament, MTI said.
The ministry acknowledged that Singapore will have no control over how long various TPP countries take to enact the necessary laws and ratify the agreement.
"Nonetheless, Singapore hopes to see entry into force of the TPP without unnecessary delay within the next three years or sooner if possible," it said.