Robert Hopton is a happy man, his architecture company ‘Woodhead International’, has just won two major contracts in Singapore and is ready to expand. Woodhead has picked up the contract to design the interiors at Changi Airport’s Terminal 3, which houses Singapore Airlines. The project is estimated to be worth around S$1.4 billion (A$1.35 billion). This comes on top of the deal to design the interiors at Singapore’s National Library (worth around S$230 million equivalent to A$222 million).
Even though Woodhead International has been in business since 1927, they have only been an exporter for the past eight years. As well as Singapore, Woodhead has operations in China, Thailand, Malaysia, India and Nepal. One reason for their success has been their willingness as professionals to share knowledge. As Robert Hopton explains: “Success begets success. Our willingness to partner with others and share information has been one of our greatest assets. It is an excellent way of growing new opportunities and building your capacity to enter new markets”.
Woodhead International is just the sort of Australian professional services company that will benefit from the newly announced Singapore and Australia free trade agreement (SAFTA). SAFTA is the first bilateral trade agreement for Australia since the conclusion of the Australia-New Zealand Closer Economic Relations agreement (CER) some two decades ago.
In announcing the breakthrough, the Minister for Trade, Mark Vaile, noted that: “SAFTA will be a comprehensive agreement, promoting greater economic integration and bilateral relations between our countries, it shows that FTAs can deliver outcomes in a shorter time frame than is possible in the WTO, while complementing and reinforcing the multilateral process”.
So what’s so special about Singapore? Firstly, as a trade partner, Singapore is no small beer (and note that SAFTA takes off tariffs on Australian beer and stout). In export terms, Singapore is Australia’s seventh most important destination in terms of merchandise exports, netting us over A$4.9 billion in 2001-02. Only Japan, USA, China, Korea, New Zealand and the UK are more important. In return, Singapore is a major source of merchandise imports too, at around A$4 billion in 2001-02.
Secondly, as shown by the Woodhead example, Singapore is very important in terms of services. Singapore accounts for A$2.2 billion in services exports (48 per cent of all exports to ASEAN economies, on 2001-02 data) and A$2.2 billion in services imports (or half of all imports from ASEAN). Accordingly, Australia’s professional services sector, such as lawyers, accountants, architects and educational institutions are very important in Singapore and will especially benefit from the SAFTA. As Sean Riley, Austrade’s Senior Trade Commissioner for Singapore observes “Services is the name of the game here in Singapore, it’s a sophisticated, knowledge-based economy with many opportunities for Australian professionals – who have a good reputation throughout the region. SAFTA will to help them take advantage of that good will”.
The SAFTA services agreement means that “national treatment” will apply – both countries will treat each other’s service suppliers on the same terms as their own businesses. Market access restrictions will also be lifted. In practical terms this means that there will be many new opportunities for Australian service companies. For instance, in financial services, Australian firms will be able to invest in local banks on favourable terms. In education, Australian TAFE colleges and universities will be able offer educations services to Singapore students under liberal conditions and Singapore government scholarships will be tenurable at Australian universities. In legal services, Australian law firms will be able to form joint ventures with Singapore firms and more Australian university law degrees will be recognised. In the professions there will be a removal of residency requirements for Australian accountants, engineers, auditors and architects.
Robert Hopton agrees that the SAFTA will benefit his company of professional architects. “It’s the icing on the cake. It will ease residency requirements, allow mutual recognition agreements, and let us use our success in Singapore as a springboard into the rest of South and East Asia”, he said.
So let’s hope that many other Australian professional service companies follow Woodhead’s lead. As shown during the Sydney Olympics, Australia is a world-class provider of knowledge-based services. Bilateral free trade agreements, like the one just completed with Singapore, will help us take advantage of service opportunities around the region.
