Outward orientation and an openness to trade and investment flows have been a key component of Singapore's growth strategy over the years. Its total trade volume currently accounts for about thrice of its GDP, and the country is often placed in the league of “super-trading” nations. Singapore has always been a leading advocate of global trade liberalization through the WTO. However, limited progress on many important issues in the WTO, related to trade and investment liberalization, has raised perceptions that the multilateral route to trade liberalization has been disappointingly slow and negotiations have been rather protracted and cumbersome. It is this perception that led highly open and trade-dependent economies like Singapore to simultaneously pursue a second track to trade liberalization through the regional route, which has involved Southeast Asia through the ASEAN grouping and the larger Asia and Pacific economies through the Asia-Pacific Economic Co-operation (APEC) grouping.

Nevertheless, in the aftermath of the East Asian crisis of 1997–98 and its adverse impact on trade and liberalization efforts within ASEAN and APEC, the pace of and willingness to undertake trade and investment liberalization of Singapore's neighbours in ASEAN have slowed down. This has led Singapore to explore a third option of bilateralism to advance freer trade in Southeast Asia and the region in order to to complement its strong advocacy for multilateral liberalization. It is in this context that Singapore has been engaged in negotiating bilateral FTAs with its major trading partners who are “like-minded” in terms of willingness to undertake comprehensive measures to liberalize trade and investment among themselves. This strategy has also been interpreted as a way for Singapore to solve the “convoy problem” whereby least willing members within ASEAN could slow down the pace of trade liberalization.

In general, Singapore's FTA strategy has been pursued with twin goals. The first is to strengthen its economic linkages and gain a “first-mover” advantage vis-à-vis its major trading partners. The second goal has been to concomitantly enhance its market access in new, emerging market economies that have been equally committed to trade and investment liberalization across both goods and service sectors.