Prime Minister Mir Zafarullah Khan Jamali and his Singaporean counterpart Goh Chok Tong witnessed the signing ceremony.
Earlier, both the prime ministers and their delegations held "substantial talks" covering all aspects of bilateral relations with particular focus on enhancing co-operation in economic and commercial fields, a senior foreign office official said.
The two leaders also had a 15-minute long exclusive meeting.
Pakistan and Singapore also exchanged views on terrorism and decided to co-operate closely in countering this threat. The two sides reaffirmed their commitment to combating terrorism and other transnational crimes in a comprehensive manner.
"The two countries agreed to enhance counter-terrorism co-operation between the officials dealing with security and intelligence and law enforcement agencies in their respective capitals," the joint declaration said.
The Prime Minister of Singapore offered to open negotiations with Pakistan for a Free Trade Agreement. Prime Minister Jamali welcomed the offer.
The over an hour-long meeting between the two delegations discussed the regional situation in South Asia, Afghanistan, North Korea and Iraq.
The Prime Minister of Singapore appreciated the steps taken to open talks between Pakistan and India and emphasised the need for "sustained efforts for resolution of all disputes."
Greater co-operation between Saarc and Asean countries was also discussed and emphasised by both sides.
Both agreed the need to have a regular political consultation between the two foreign ministers and a Memorandum of Understanding was signed between the two foreign secretaries.
The visit of Prime Minister of Singapore has led to a qualitative upgrading of Pakistan-Singapore relations in all fields and a joint declaration signed at the ministerial level envisages directions in building bilateral relations with an eye to future, the official said.
The joint declaration said the two countries would "increase co-operation in the field of defence through interactions and exchanges between the relevant ministries."
The two sides also agreed for enhanced co-operation in Information Technology, science and technology, more people to people contact and student exchanges.
The Pakistani side included Finance Minister Shaukat Aziz, Interior Minister Faisal Saleh Hayat, Minister for Commerce Humayun Akhtar and Minister for Information Technology Awais Leghari, Foreign Secretary Riaz Khokhar.
Following is the text of the joint declaration:
The Government of the Islamic Republic of Pakistan and the Government of the Republic of Singapore desirous for further strengthening their close co-operative ties and friendship between their peoples, have agreed as follows:
(i) The Islamic Republic of Pakistan and the Republic of Singapore value highly their mutually beneficial co-operation, which has been strengthening and broadening at the strategic, political, economic and cultural planes.
(ii) At the strategic and political levels, both countries shall make every effort to further develop their relations and multi-faceted co-operation for the common benefit of the two countries.
In this regard, each side shall be guided by applicable principles of international law as well as traditions of friendly relations between their two countries, and furthermore, on the basis of mutual respect of national sovereignty, non-interference in each other's internal affairs and equality as well as the basis of respect for human rights and democratic principles of each country.
(iii) The Islamic Republic of Pakistan and the Republic of Singapore shall co-operate in maintaining peace and stability in South East Asia, South Asia and other regions of the world, and the promotion and preservation of international security.
They reaffirm their commitment to implement the purposes and principles of the Untied Nations Charter and to contribute to the strengthening of the peacekeeping and peacemaking role of the United Nations and also to the peaceful settlement of conflicts and disputes.
(iv) The Islamic Republic of Pakistan and the Republic of Singapore shall strengthen mechanisms of mutual consultation and co-operation by instituting regular working level consultations alternately in their respective capitals between their respective foreign ministries.
(v) The Islamic Republic of Pakistan and the Republic of Singapore underlined the importance of international co-operation in the fight against terrorism, and reaffirmed their countries' commitment to combating terrorism and other transnational crimes in a comprehensive manner.
The two countries agreed to enhance counter-terrorism co-operation between the officials dealing with security and intelligence and law-enforcement agencies in their respective capitals.
(vi) Promote trade, including direct trade, and in this context launch negotiations on the Free Trade Agreement toward the end of 2004.
(vii) Encourage joint ventures and promote closer co-operation between the private sectors of both countries.
(viii) Explore, develop and conclude arrangements for mutually beneficial co-operation in the fields of Information Technology and Telecommunications.
(ix) Increase co-operation in the field of defence through interactions and exchanges between the relevant ministries.
(x) Develop and promote activities and programmes to enhance people-to-people and cultural contacts.
(xi) Increase cultural contacts, institute student exchanges, facilitate collaboration among academic institutions.
(xii) Promote co-operation in Science and Technology through sharing of information and expertise, joint research on sectors of common interest, and to jointly organise seminars bringing together senior scientists of both sides.