Singapore and Australia have inked a green economy agreement with the aim to establish "common rules and standards" that drive trade and environmental sustainability. Pipped as the first such global trade pact, it encompasses various initiatives including cross-border clean energy trade and digital trade platforms.
Both countries also had set up a technical working group to establish statistical measurements of the green economy, according to a joint statement released Tuesday by Singapore's Ministry of Trade and Industry (MTI) and Ministry of Sustainability and the Environment. The group would discuss the use of environmental-economic data to facilitate policy decisions and reporting.
The Singapore-Australia green economy agreement outlines principles and cooperation across seven key areas, including trade and investment, green and transition finance, as well as clean energy, decarbonisation, and technology. it spans 17 joint initiatives that collectively aim to facilitate collaboration in emerging areas.
For instance, under the trade agreement, Singapore and Australia would support small and midsize businesses (SMBs) in the joint development of green technologies as well as products and services. This would come in the form of grants and business matching efforts, where funds could be used for the development and commercialisation of products that drive the decarbonisation of economic activities.
An MOU between the Australian Trade and Investment Commission and Enterprise Singapore also would look to promote and support engagements between businesses in the green economy sectors. This aimed to fuel bilateral trade and investment in the market through activities such as joint business missions and promotion of green economy opportunities.
In addition, both countries would collaborate on environmental sustainability policies and schemes related to eco-labelling. An agreement to be signed between Singapore Environment Council and Good Environmental Choice Australia would look to establish mutual recognition and joint promotion of select eco-labels, and upskilling capabilities in such schemes.
The two nations also had identified 372 environmental goods and 155 environmental services for which efforts would be made to reduce tariff and non-tariff trade barriers. Describing the two lists as "more ambitious" than existing lists established worldwide, Singapore said the lists were "non-exhaustive" and would be periodically assessed so they remained updated with market developments and took into account industry feedback.
Both countries would address non-tariff barriers as part of efforts to reduce costs for exporters in the relevant markets as well as increase deployment of and access to green and low-emissions technology.
There also were plans to work on a digital verification platform underpinned by Singapore's TradeTrust framework, which was developed to facilitate the exchange of digital trade documents across systems. It encompassed an accreditation structure to certify technical applications that complied with relevant legislations.
The digital verification platform would look to cut environmental costs through digital trade procedures and drive a paperless trade environment. This initiative would straddle both the new green economy pact and digital economy agreement Singapore and Australia inked in 2020.
The two countries also would identify opportunities for bilateral and international collaboration on standards, technical regulations, metrology, and conformity assessment procedures in green economy sectors. Efforts here would aim to cut compliance costs for exporters of environmental goods through increased compatibility and interoperability.
There also were plans to establish a joint working group to develop an architecture for cross-border electricity trade and enhance regional energy connectivity. This would expand existing arrangements, including free-trade agreements where appropriate.
Singapore's Minister for Trade and Industry Gan Kim Yong said: "Singapore and Australia are open economies with extensive bilateral trade and investment links. Building on this strong foundation, we have developed the green economy agreement, a first-of-its-kind agreement and pathfinder for rules and standards in advancing trade and environmental sustainability.
"The [agreement] will reduce barriers to cross-border trade in clean energy as well as green trade and investment," Gan said. "In doing so, we catalyse green growth opportunities and good jobs, while promoting decarbonisation and supporting our smooth transition into a green economy."
Australia is Singapore's 10th largest trading partner, while Singapore is Australia's 5th largest trading partner.
The 2020 Singapore-Australia Digital Economy Agreement encompassed several areas of cooperation, including cross-border data flow, digital payments, and artificial intelligence. Both countries in April 2022 also signed an agreement to facilitate trade and investment in their respective fintech sector and boost ties between policy officials and regulators.