New trade deal boosts S'pore's strategic importance to U.S.
New trade deal boosts S'pore's strategic importance to U.S.
Agence France-Presse, Singapore
The U.S.-Singapore Free Trade Agreement (FTA) will boost Singapore's strategic importance to Washington and produce immediate benefits for both countries, officials and businessmen said Wednesday.
The first FTA between the U.S. and an Asian country was signed in Washington Tuesday by President George W. Bush and Prime Minister Goh Chok Tong, kicking off a sweeping liberalization of bilateral trade in goods and services.
By widening intellectual property protection in an increasingly patent-driven world economy, the FTA also strengthens Singapore's status as the main portal for U.S. business in Southeast Asia's market of more than 500 million people.
Under the FTA, even the distinctive, throaty roar of a Harley- Davidson motorcycle -- one of the most potent icons of American industry -- can be patented, in addition to discoveries in new fields like biotechnology.
"This is a very comprehensive agreement which we hope will be a standard for other free trade agreements in ASEAN and elsewhere," said Kristin Paulson, chairman of the American Chamber of Commerce in Singapore.
Singapore, with just four million people, is the most prosperous but also the most trade-dependent among the 10 members of the Association of Southeast Asian Nations (ASEAN), which has created a regional FTA for the grouping.
The U.S.-Singapore deal is seen as the first thread in an interlocking web of bilateral FTAs linking North America and ASEAN.
Raymond Lim, Singapore's minister of state for foreign affairs and trade and industry, said the FTA will raise Singapore's gross domestic product (GDP) by 0.5 percent.
That would have a substantial impact on a city-state which has lowered its GDP growth target this year to 0.5 to 2.5 percent largely because of fallout from the Severe Acute Respiratory Syndrome (SARS) epidemic in the region.
Lim said the agreement is likely to spur hundreds of American companies to open regional offices in Singapore and use the city- state as a springboard to further penetrate the Asian market.
There are already 1,300 American companies and 15,000 U.S. nationals in Singapore, where private U.S. investment is estimated at more than US$27 billion U.S. Two-way trade is estimated at $34 billion.
Singapore, despite the disapproval of its Muslim neighbors, gave full support for the U.S. campaign against terrorism after the Sept. 11, 2001 attacks, as well as the recent U.S. war on Iraq.
The Singapore Confederation of Industries said incoming U.S. investment commitments should rise beyond the 2002 level of $2.4 billion as more U.S. multinational corporations set up their Asian bases here.
For American companies, one immediate benefit is the opening up of Singapore's financial, insurance and legal services sectors, and so reach deeper into the region's services market.