1. Preferential Treatment

Singapore service suppliers enjoy preferential trade commitments from our FTA partners.

2. Predictable Operating Environment

Services commitments in FTAs lock in a certain minimum level of market access for our service suppliers. FTAs serve as an “insurance policy” to deter a trading partner from changing their laws to become more restrictive, even when government regimes change.

3. Recourse

FTAs provide an opportunity for service suppliers to seek recourse should a trading partner choose to contravene its FTA commitments.

Market Access

FTA partners are obliged to remove/reduce market access restrictions on:

1. Number of service suppliers
Example: Quotas are imposed on the number of service suppliers employed.


2. Value of service transactions or assets
Example: Bank subsidiaries are limited to 30% of total domestic assets of all banks.


3. Number of service operations/output
Example: The total amount of projects that a company is allowed to undertake is fixed.


4. Number of persons that may be employed
Example: Only 5 Singaporeans are allowed for each establishment of a firm.


5. Type of legal entity or joint venture required
Example: In a particular sector, commercial presence may only be in the form of a representative office.


6. Foreign capital participation
Example: Singapore companies can only hold up to 49% of equity in a foreign country.

National Treatment

FTA partners are obliged to accord treatment to services and service suppliers in a manner that is no less favourable than accorded to their own nationals.

Example

• Nationality or residency requirements for directors of financial institutions
• Discriminatory licensing, qualification and registration requirements
• Eligibility for subsidies reserved to nationals
• Technology transfer, requirement to recruit and develop more local human resources
• Local content requirements
• Operational limits on foreign companies (e.g. limitations on location of branches)

Domestic Regulation

FTA partners are obliged to ensure that general measures affecting trade in services are administered in a reasonable, objective and impartial manner.

Domestic Regulation disciplines apply to Qualification Requirements and Procedures, Technical Standards and Licensing Requirements. These measures should be based on objective and transparent criteria, should not be overly burdensome and should not in themselves restrict trade in services.

Example: Application procedures for licenses, qualification requirements for professionals

Most Favoured Nation Treatment

FTA partners are obliged to grant each other treatment no less favourable than what they grant to any other trading partner.

Local Presence

FTA partners are obliged to not require a service supplier of other FTA partners to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.

Transparency

FTA partners are obliged to make known all relevant measures affecting trade in services to each other within a reasonable period of time; through prompt publication, maintenance of enquiry points, and fair judicial review.

Mode 1: Cross-Border Supply

Consumer and Service Supplier remain in different countries. Only the service crosses the border.
(E.g. A Singaporean doctor provides medical advice to a patient in a foreign country via e-mail/telephone.)

Mode 2: Consumption Abroad

Consumers making use of a service in another country.
(E.g. Medical tourism. A foreign patient enters Singapore and receives treatment at a hospital located in Singapore.)

Also covered is the movement of consumer's property.
(E.g. Sending medical equipment abroad for repair.)

Mode 3: Commercial Presence

Subsidiaries or branches which are set up in another country to provide services.
(E.g. A Singaporean Medical Group sets up a hospital in a foreign country.)

Mode 4: Movement of Natural Persons

Individuals travelling from their own country to supply services in another country on a temporary basis.
(E.g. A Singaporean doctor moves over to a foreign country to provide medical services to patients in that country.)

12 main categories
(World Trade Organisation W/120 Services Sectoral Classification List)

Individuals travelling from their own country to supply services in another country on a temporary basis.
(E.g. A Singaporean doctor moves over to a foreign country to provide medical services to patients in that country.)

160 sub-sectors

Corresponding number of Central Product Classification [CPC]

CPC is a tool, Members may describe sectors by using other definitions.

Services Chapter
Lays out disciplines/rules for Parties

Positive List

Negative List

2 types of reservations

Annex I: Standstill reservation
Enables FTA partner to preserve existing trade restricting measures. This means that it can only remove or loosen, and not tighten, current restrictions in future.

Annex II: Reservations for future flexibility
FTA partner retains full discretion and flexibility to implement future trade restrictive measures for a particular service sector or government activity.