Market accessAPECExport controlsNZ and the WTOOECDTrade AgreementsTrade RelationshipsTrade and economic analysisTrade lawTrade scholarships
Find MFAT's information paper on a country or territory. (We don't have information papers on all countries.)
Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
If you come across a term that isn't included in the Glossary please send us an email.
ISBN 0-477-03768-2 © Crown Copyright Reserved May 2002
The explanations given for certain provisions within the CEP have been summarised in this brochure.
The Agreement between New Zealand and Singapore on a Closer Economic Partnership, commonly known as the CEP, entered into force on 1 January 2001. It is the most comprehensive trading agreement, outside of Closer Economic Relations with Australia, that New Zealand has yet negotiated. The CEP aims to build on the close historical ties between Singapore and New Zealand by improving opportunities for trade in goods, services and investment.
The two Governments announced their intention to negotiate an agreement in September 1999, and negotiations were completed within one year. The two Prime Ministers signed the Agreement in Singapore on 14 November 2000.
The CEP is comprehensive, covering goods, services, investment and technical and hygiene/quarantine barriers to trade in goods.
The CEP commits us to explore ways to reduce compliance costs for business, to lower and remove barriers to services trade and to encourage two-way investment. In order to ensure the CEP remains relevant for business, and a model for possible other closer economic relationships in the region, the CEP will be reviewed at ministerial level every two years. My Singaporean counterpart and I held the first review in Singapore in November 2001. The second review is scheduled for the end of 2003 in New Zealand. In the lead up to the next review, your comments as a practitioner are welcome. Only with your feedback can an agreement such as this one remain dynamic and assist New Zealand's exporters to access new international markets.
Hon Jim Sutton
New Zealand Minister for Trade Negotiations
May 2002
The Agreement between New Zealand and Singapore on a Closer Economic Partnership (CEP) came into force on 1 January 2001. It aims to build on the close historical ties between the two countries by improving opportunities for trade in goods, services and investment.
This guide does three things:
New Zealand and Singapore will regularly examine prospects for improving the CEP to ensure it remains relevant for business. Your comments are welcome.
The explanations given for certain provisions within the CEP have been summarised in this guide. Detailed information about the CEP, and the full text of the Agreement, can be found on the Ministry of Foreign Affairs and Trade's website.
The principles of the New Zealand-Singapore CEP are:
You can now import duty-free from Singapore, but....
Under the CEP, goods made in New Zealand or Singapore can be traded between the two countries duty-free.
The out-sourcing of parts of the production chain in both countries complicates the definition of what is "made in New Zealand or Singapore". Not every product is a home-produced block of butter or a cut of meat.
For products from New Zealand or Singapore to be eligible for duty-free access into the other market, the following conditions must be met:
In all cases Singapore and/or New Zealand content—including QCT—must meet the 40 percent minimum area content requirement to qualify for duty-free entry.
Duty-free access will not be granted if:
If in doubt about a particular shipment, Customs officials from the importing country may—with the other country's consent—visit the exporter, supplier or manufacturer of the goods in question to verify the claim for preferential access.
Importers of goods that do not meet the 40 percent threshold for area content will continue to pay tariffs at the normal rate applying to imports from countries that do not have a preferential agreement with New Zealand.
If an investigation by Customs in the importing country concludes preference is justified, any duties originally paid to release goods for distribution will be refunded. An importer may appeal a decision of the New Zealand Customs Service to the independent Customs Appeal Authority.
The CEP preserves the right for New Zealand importers or manufacturers to seek penalties against competing imports suspected of undercutting local products by being "dumped" at prices below the cost of production. But the special relationship with Singapore is reflected in higher thresholds at which such measures might be triggered. These higher thresholds minimise the opportunities to use anti-dumping in an arbitrary or primarily protectionist manner.
As with CER with Australia, safeguard actions will not be possible under the CEP.
For New Zealand services exporters, the CEP will mean better access to Singapore's markets in sectors such as architecture, engineering, telecommunications, finance, education and environmental services. Each country has agreed to make it progressively easier for services providers to supply services to the other's market.
The CEP aims to facilitate trade in those sectors, particularly professional services, where recognition of qualifications and professional registration is required to provide the full range of services. Accordingly, the Governments have agreed to facilitate discussions between industry bodies, regulatory agencies and educational institutions to reach agreement on mutual recognition. This is an industry-driven process, as it is acknowledged that services providers are best placed to judge whether competitors are sufficiently qualified and that their work meets benchmarks applying here. This scrutiny is not intended to be misused by either country to shut out competition. Both Governments have undertaken to ensure this does not happen, and will take measures to combat "closed shop" practices.
This process of encouraging Singapore to give better access to our services providers is an ongoing one, with a provision in the CEP for consultations on an issue-by-issue basis and a meeting at the ministerial level at least every two years.
It is important that New Zealand professionals having difficulties doing business in Singapore advise the Ministry of Foreign Affairs and Trade, so the problem can be raised with Singapore. Please contact the Ministry's South East Asia Division (email sea@mft.govt.nz, phone 64 4 439 8384).
A full list of sectors where Singapore has committed itself to giving New Zealand suppliers market access and the same treatment as it gives its own suppliers is available.
The CEP should make it easier for New Zealanders to buy services from Singapore. New Zealand has agreed to lock in place current access conditions for Singaporean services suppliers in a number of areas, including engineering services, computer and related services, transport, dental services, environmental services and some business sectors, including market research and management consulting.
A full list of sectors approved by New Zealand for Singapore to seek access under the CEP is available.
The CEP does not cover immigration or general access to Singapore's labour market. However, it does make it easier for New Zealand professionals to supply services on a temporary basis in Singapore, either as business visitors (services providers not selling directly to the public), or as senior or specialist employees working in the Singapore offices of a New Zealand firm. Employees must have been with the firm for at least a year. These intra-corporate transferees are eligible for entry for an initial period of three years. New Zealand business visitors entering Singapore to negotiate or service a contract may remain for a month, with a possible extension by up to two months.
Under the CEP, contractors in each country have equal status when bidding for most government purchasing, works or services contracts above a certain value in the other country. Some areas—including the public provision of most medical care and education—remain the exclusive domain of the country in which they are provided. But for most other areas, the principle of "national treatment"—or a single market—prevails.
Both New Zealand and Singapore already have very open and transparent government procurement markets, but the CEP introduces binding commitments that give business added security of market access. New Zealand and Singapore companies tendering for government procurement contracts valued at, or above, IMF Special Drawing Rights 50,000 (equivalent to Singapore $115,500 and New Zealand $134,500 as of May 2002) are guaranteed equal opportunities and treatment.
The Singapore Government publishes information on its procurement policy, including opportunities for tendering, on the internet [external link]. For most government supplies, central registration with the Ministry of Finance (Expenditure & Procurement Policies Unit) is required. The application form for registration can be downloaded [external link].
Professional organisations also have the opportunity to act as a noticeboard for alerting their members to these contracts.
New Zealand's central government has also undertaken to make "best endeavours" to encourage state-owned enterprises, regional and local government to comply with this commitment.
Singaporean Government contracts are advertised on: www.gebiz.gov.sg [external link]
New Zealand Government contracts are advertised on: www.gets.govt.nz [external link]
The CEP aims to encourage two-way investment, but not without limitations. In New Zealand, the Overseas Investment Commission will continue to examine certain investment proposals, including those above a certain value or company shareholding in large firms, and/or for major fishing assets and for most rural or sensitive foreshore areas.
Singapore's investment rules prohibit the ownership of land, low-rise buildings and government-built apartment blocks by nonresidents. Singapore also reserves the right to favour its own nationals and permanent residents:
The CEP streamlines the economic relationship between New Zealand and Singapore by reducing "red tape".
Customs Streamlining
The New Zealand and Singaporean customs authorities are currently working on streamlining their operations, with a view to implementing paperless trading.
Competition Law
The CEP emphasises the need for the regulatory authorities in both countries to work together to improve the climate for trade and investment by adhering to the principles of fair competition and nondiscrimination. This will involve increasing coordination among regulatory authorities across borders and a focus on reducing transaction and compliance costs for business.
Transparency
The CEP encourages the prompt publication of all new laws and administrative rulings affecting trade in goods, services and investment, including providing an opportunity to comment on each other's new initiatives.
Technical and Quarantine Standards
New Zealand wants to establish the most appropriate and cost-efficient approach for removing barriers to the movement of goods between Singapore and New Zealand, by encouraging Singapore to recognise New Zealand's standards and vice versa, or by harmonising standards employed in both countries. This has been achieved already in respect of product testing of electrical equipment and practices.
Under the CEP, if a disagreement between an investor from one country and the Government of the other cannot be settled amicably within six months, the dispute may, if both parties agree, be submitted to the International Centre for Settlement of Investment Disputes based in Washington for conciliation or arbitration.
In the case of government procurement, any dispute that cannot be resolved between a New Zealand complainant and the procuring government body can be referred to the New Zealand Ministry of Economic Development for consideration. If that fails to settle the dispute, the matter can be referred to the appropriate Minister. If that still does not resolve the dispute, it may be referred to arbitration by a tribunal convened especially for that purpose.
The Treaty of Waitangi
Article 74 of the CEP deals with the Treaty of Waitangi. The exemption provided is not to be used in an arbitrary or discriminatory way against Singapore interests. The interpretation of the Treaty of Waitangi is not subject to the dispute settlement procedures outlined above.
Taxation and Bilateral Air Services
Taxation issues will be addressed through the existing Double Taxation Agreement with Singapore.
Air services issues will continue to be dealt with under the plurilateral Air Services Agreement, of which New Zealand and Singapore are both signatories.
If you are having difficulties doing business in Singapore please contact the South and South East Asia Division of the Ministry of Foreign Affairs and Trade.
The Ministerial review of the CEP in November 2001 was the first of what will become a regular review every two years. The next review is scheduled to take place in New Zealand in 2003.
An economic partnership of this type is constantly evolving as practical experience and ambition coincide, and issues may be dealt with on a case-by-case basis. We welcome your ongoing feedback. It is important that New Zealanders having difficulties doing business in Singapore advise New Zealand officials, so the problems can be raised with Singapore.
To do this please contact the South and South East Asia Division of the Ministry of Foreign Affairs and Trade email sea@mft.govt.nz, Ph: 64 4 439 8384
