Singapore

Bilateral relations

Singapore is Australia's largest trade and investment partner in ASEAN and sixth largest bilateral trading partner overall. Australia and Singapore have a bilateral free trade agreement and are both also member countries of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The COVID-19 pandemic disrupted bilateral trade in 2020. But goods exports to Singapore managed to rise, to $12.5 billion in 2020 (of which iron ore sales represented $3.2 billion), up from $12 billion in 2019. Alongside iron ore, energy products contributed significantly to goods exports. Australia sent about $1.3 billion in agricultural products to Singapore, led by animal oils and fats, meat, alcoholic beverages and dairy. Manufactured product exports totalled $1.8 billion and gold exports amounted to $1.4 billion.

Goods imports from Singapore fell sharply to roughly $7.4 billion in 2020 from $10.4 billion in 2019. The bulk of imports are refined petroleum products.

The COVID-19 pandemic and associated international travel restrictions disproportionately hurt services trade in 2020. Ongoing international travel restrictions points to another challenging year for services exports in 2021. Singaporean student enrolments in Australia remained dipped slightly to 7,400 in 2020 from consistently above 8,000 in the years prior. Meanwhile, tourist arrivals slumped to 58,000 in 2020 after reaching almost 480,000 in 2019. Longer term, rising incomes in Singapore will likely support demand for Australian education and tourism.

Notwithstanding the pandemic, Singaporean investment in Australia rose to $116.5 billion in 2020 from $100 billion in 2019 (representing 2.9% of the total stock of foreign investment). Singaporean investment has traditionally been concentrated in real estate, but has become somewhat more diversified. For instance, the Government of Singapore Investment Corporation recently increased its investment in e-commerce, logistics, data centres, fintech, and health-tech, and has also expressed an interest in infrastructure and energy.

Australian investment in Singapore softened to $63 billion in 2020 from $84 billion in 2019 (accounting for 2.1% of Australia’s foreign investment portfolio). Major businesses invested in Singapore include the four major banks; engineering design and construction firms including Lend Lease Asia Holding and CIMIC Group and logistics groups such as Toll Holdings. BHP Billiton and Rio Tinto are among other Australian corporates that have some business functions based in Singapore.