U.S.-Singapore Free Trade Agreement
The U.S.- Singapore Free Trade Agreement went into effect in January 2004. Under the agreement, most tariffs were eliminated immediately, with the remaining tariffs phased out over a three to ten-year period.
The Agreement was signed on May 6, 2003 by President Bush and Goh Chok Tong, the Prime Minister of Singapore. The U.S. House of Representatives and Senate passed the FTA in July 2003 by a vote of 277-155 and 66-32 respectively. This marked the first time the Trade Promotion Authority (approved in 2002) was used.
A major strategic trading partner of the United States and one of America’s closest friends, Singapore has one of the most open, well-regulated, safe and secure investment climates in the world. It is consistently rated among the most competitive economies in the world. The USSFTA is making this remarkably productive relationship even closer. Already, more than 1300 American companies have a presence in Singapore, and about 330 of these have made Singapore their regional business headquarters in Asia. Additionally, an estimated 17,000 Americans live in Singapore.
U.S. exports to Singapore totaled $26.2 billion dollars, and two-way trade between the United States and Singapore increased to more than $44.6 billion in 2007. Since implementation of the U.S.-Singapore FTA in 2004, U.S. exports to the nation have increased by $7 billion. According to the Office of the U.S. Trade Representative, new market opportunities have also been created, including those for pharmaceutical products and organic chemicals.
Singapore is the 10th largest export market for California. In 2007, California exports to Singapore decreased to $4.3 billion.
Singapore is a great friend for the United States in Asia. Singapore expressed early and unequivocal support for the United States and the War on Terrorism following the events of September 11. Singapore's support then and since has been unwavering. It has been a model of cooperation on anti-terrorism efforts.
The U.S.-Singapore FTA enhances mutual interests in a stable, prosperous ASEAN and East Asia, and will further strengthen the partnerships across the Pacific. With four million people, Singapore, one of the busiest port cities in the world, already has free trade pacts with New Zealand and Japan.
The agreement represents the new economy, focusing on removing Singapore restrictions on a wide range of services, including high technology sectors such as engineering, medical, information technology, environmental, legal, financial, education and distribution. Investment in Singapore can strengthen the region as an integrated production space, and help anchor America's leadership in the global manufacturing operations of Southeast Asia.
With the bilateral relationship, the United States and Singapore can put in place systems and procedures to ensure that only legitimate goods can claim preferential treatment under the FTA. The exchange of information will be increased so that both sides can use risk management techniques to block illegal trade.
American companies have a great deal to gain with the USSFTA. This comprehensive agreement benefits American firms and workers, and complements ongoing regional and multilateral trade and investment liberalization efforts.
The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business. New multilateral, sectoral and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
- The United States-Singapore Free Trade Agreement sends a strong signal that the United States intends to remain heavily engaged in Asia for a long time to come in business, economics, security and international politics.
- The FTA stands as a model for other bilateral trade agreements in the region and in multilateral forums.
- The U.S.-Singapore FTA contributes to regional and global trade liberalization and strengthen the multilateral trading system.
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