The upgraded Singapore-Australia Free Trade Agreement came into force yesterday to herald a new era of bilateral economic relations, the Ministry of Trade and Industry (MTI) said.
Its key benefits include updated trade rules in goods, increased opportunities for businesses to bid for government procurement contracts, enhanced access to each other's services sectors and greater facilitation for investments.
There is also improved mobility for businessmen and rules to ease trade in the digital economy.
The upgraded agreement was signed by Minister for Trade and Industry (Trade) Lim Hng Kiang and Australia's Minister for Trade, Tourism and Investment, Mr Steven Ciobo, in October last year.
"Since Minister Ciobo and I signed the agreement last year, both sides have been working expeditiously to bring the agreement into force so that Australian and Singapore businesses can reap the enhanced benefits," Mr Lim said yesterday.
"I look forward to greater collaboration between companies from both sides."
Singapore companies will now be able to bid for procurement contracts from Australia's Federal government and the eight states and territories. Singapore investors will also not need to seek approval from Australia's Foreign Investment Review Board for investments below A$1.094 billion (S$1.12 billion) in "non-sensitive sectors" in Australia.
The new deal also contains more flexible rules of origin, which will make it easier for Singapore exports into Australia to qualify for tariff-free treatment.
It also reduces regulatory barriers that impede trade in goods such as wine and distilled spirits, cosmetics, medical devices and pharmaceuticals.
Bilateral trade between the two countries has grown steadily over the years, and reached $18.2 billion in 2016, the MTI said. Australia was Singapore's 13th largest trading partner last year while Singapore was Australia's seventh largest.
Singapore is also Australia's fifth largest investor, having pumped in about A$98.9 billion worth of investments in real estate, telecommunications, tourism and utilities sectors, said the MTI.
Australia's foreign direct investment into Singapore totals around $15.5 billion, mainly in the financial and insurance services sectors.