A FREE trade agreement (FTA) is a legally binding agreement between two or more countries to reduce or eliminate barriers to trade as well as facilitate the cross border movement of goods and services between the territories of the parties.

FTAs help strengthen business climates by eliminating or reducing import tariff rates, providing preferential access to services sectors, easing investment rules, improving intellectual property regulations, and opening government procurement opportunities.

Singapore has a global network of 13 FTAs with our major trading partners, offering Singapore-based exporters and investors a myriad of benefits:

• If you are a Singapore manufacturer exporting goods out of Singapore, your importer in FTA partner countries will save on import tariffs, making your export more price competitive. If your importer is your overseas subsidiary, this tariff savings will be internal savings for your company.
• If you are a Singapore investor operating in Singapore's FTA partner countries, you will enjoy savings when you import from Singapore. For the Asean-plus FTAs, you can also enjoy savings when you import from the partnering Asean countries.
• If you are a Singapore- based company venturing into overseas markets in Singapore's FTA partner countries, you will enjoy benefits including preferential access to certain sectors, investment protection, intellectual property protection, increased business travel convenience, mutual recognition of standards & qualifications, and opportunities to bid for government tenders.

For more information on how you can capitalise on Singapore's FTAs, please visit www.fta.gov.sg

The Asean-China Free Trade Area pact

The Agreement on Trade in Goods of the Framework Agreement on Comprehensive Economic Co-operation between Asean and China (Trade in Goods Agreement) was signed by Asean and China's economic ministers on November 29, 2004 and came into force on July 20, 2005.

Under the Trade in Goods Agreement, the six original Asean members (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) and China have to eliminate tariffs on 90 per cent of their products by 2010; while the remaining Asean countries (Cambodia, Lao PDR, Myanmar and Vietnam) have until 2015 to do so.

Following the Trade in Goods Agreement, the Trade in Services Agreement was signed on January 14, 2007, granting Asean service suppliers preferential market access into the growing Chinese market, beyond China's WTO market access commitments. Given the room for growth in China's services sector, the increase in market access will greatly benefit Asean service suppliers.

The article is contributed by International Enterprise Singapore.

This article was first published in The Business Times on December 18,2008.