The U.S.-Singapore Free Trade Agreement: Effects After Three Years

The U.S.-Singapore Free Trade Agreement (FTA) (P.L. 108-78) went into effect on January 1, 2004. This report provides an overview of the major trade and economic effects of the FTA over the three years ending in 2006. It also includes detailed information on key provisions of the agreement and legislative action. The U.S.-Singapore FTA has provided greater access for U.S. companies, has been instrumental in increasing bilateral trade, and has provided reassurance to Singaporeans of U.S. interest in the country. As a city-state, Singapore operates as an entrepot with essentially free trade. Under the FTA, concessions dealt mainly with providing greater access for American service providers and with strengthening the business environment in areas such as the protection of intellectual property rights and access to government procurement. In 2006, the United States ran a $6.9 billion surplus in its merchandise trade with Singapore, up from$1.4 billion in 2003. U.S. exports of goods to Singapore surged by 49% from $16.6 billion in 2003 to$24.7 billion in 2006. However, even with this rapid increase in U.S. exports, the U.S. share of Singapore’s imports declined from 16% in 2003 to 13% in 2006. This suggests that factors other than the FTA, particularly the overall growth in Singapore’s imports, contributed greatly to the increase. Major U.S. exports to Singapore include machinery, electrical machinery, aircraft, optical and medical instruments, plastic, and mineral fuel oil. On the U.S. import side, a noteworthy development is that imports of pharmaceuticals from Singapore have risen dramatically from $0.09 billion in 2003 to$2.4 billion in 2006. The FTA did not lower the U.S. tariff rate for pharmaceuticals, since they already enter the United States duty free. What appears to have occurred has been the development of Singapore as a regional center for multinational pharmaceutical companies that are stepping up exports. Negotiations for the U.S.-Singapore Free Trade Agreement were launched under the Clinton Administration in December 2000. The FTA became the fifth such agreement the United States has signed and the first with an Asian country. According to the U.S. Trade Representative, the FTA broke new ground in electronic commerce, competition policy, and government procurement. It also included what the U.S. Trade Representative considers to be major advances in intellectual property protection, environment, labor, transparency, and customs cooperation. The U.S.-Singapore FTA required congressional implementation under expedited Trade Promotion Authority legislative procedures. The debate over implementation of the FTA fell between business and free trade interests who would benefit from more liberalized trade, particularly in services, and labor or antiglobalization interests who opposed more FTAs because of the overall impact of imports on jobs and the general effects of globalization on income distribution, certain jobs, and the environment. Specific provisions of the agreement also generated debate. This report will be updated as circumstances warrant

The U.S.-Singapore Free Trade Agreement: Effects After Five Years

[Excerpt] The U.S.-Singapore Free Trade Agreement (FTA) (P.L. 108-78) went into effect on January 1, 2004. This report provides an overview of the major trade and economic effects of the FTA over the three years ending in 2006. It also includes detailed information on key provisions of the agreement and legislative action. The U.S.-Singapore FTA has taken on new importance in trade policy because the United States is engaged in negotiations to join the Trans-Pacific Partnership (TPP). The TPP negotiations are the first major market-opening initiative of the Obama Administration. On December 14, 2009, United States Trade Representative Ron Kirk notified Congress of the intent to enter into the TPP negotiations. The objective is to shape a high-standard, broad-based regional free trade agreement with Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, and Vietnam. The first round of negotiations began March 15, 2010, in Sydney, Australia. The U.S.-Singapore FTA has provided greater access for U.S. companies, has been instrumental in increasing bilateral trade, and has provided reassurance to Singaporeans of U.S. interest in the country. As a city-state, Singapore operates as an entrepot with essentially free trade. Under the FTA, concessions dealt mainly with providing greater access for American service providers and with strengthening the business environment in areas such as the protection of intellectual property rights and access to government procurement. In 2009, the United States ran a $6.6 billion surplus in its balance of merchandise trade with Singapore, up from$1.4 billion in 2003, but down from the $12.0 billion in 2008. U.S. exports of goods to Singapore surged from$16.6 billion in 2003 to a peak of $27.9 billion in 2008 before declining to$22.3 billion in 2009. Even with this rapid increase in U.S. exports to Singapore, the U.S. share of Singapore’s imports has declined from 16% in 2003 to 12% in 2009. The main reason for this is that Singapore’s overall trade is booming. Still, Singapore imports more from the United States ($28.5 billion) than from China ($26.0 billion).The U.S. balance of trade in services with Singapore declined from a surplus of $4.0 billion in 2001 to$1.2 billion 2005 but has risen to $4.2 billion in 2008. A significant increase has been in income from U.S. direct investments in Singapore. U.S. access to the Singaporean market for multinational corporations seems to have been enhanced considerably under the FTA. U.S. income from assets in Singapore rose from$6.7 billion in 2003 to $21.1 billion by 2008. On the U.S. import side (Singapore’s exports), a noteworthy development is that U.S. imports of pharmaceuticals from Singapore have risen from$0.09 billion in 2003 to $3.0 billion in 2007 before declining to$2.0 billion in 2008. Singapore has developed as a regional center for multinational pharmaceutical companies. This apparently was partly triggered by provisions in the FTA that required Singapore to strengthen its intellectual property protection. Negotiations for the U.S.-Singapore Free Trade agreement were launched under the Clinton Administration in December 2000. The FTA became the fifth such agreement the United States has signed and the first with an Asian country. This report will be updated as circumstances warrant

U.S. International Trade: Trends and Forecasts

[Excerpt] This report provides an overview of the current status, trends, and forecasts for U.S. import and export flows as well as certain balances. The purpose of this report is to provide current data and brief explanations for the various types of trade flows along with a brief discussion of trends that may require attention or point to the need for policy changes. The use of trade policy as an economic or strategic tool is beyond the scope of this report but can be found in various other CRS reports. Further detail on trade in specific commodities, with particular countries or regions, or for different time periods, can be obtained from the Department of Commerce, U.S. International Trade Commission, or by contacting the authors of this report

The Kaesong North-South Korean industrial complex

This purpose of this report is to provide an overview of the role, purposes, and results of the Kaesong Industrial Complex (KIC) in the Democratic People's Republic of Korea (DPRK or North Korea) and examine U.S. interests, policy issues, options, and legislation

Asia Pacific Economic Cooperation (APEC), Free Trade, and the 2001 Summit in Shanghai

On October 20-21, 2001, the Ninth APEC Leaders’ Meeting (summit) was hosted by China in Shanghai. The office theme for APEC 2001 was “Meeting New Challenges in the New Century: Achieving Common Prosperity through Participation and Cooperation” with the sub-themes of: (1) sharing the benefits of globalization and the new economy, (2) advancing trade and investment, and (3) promoting sustained economic growth. For the United States, APEC raises fundamental questions that are of special interest to Congress. One is whether consensus can be achieved on the APEC vision of free trade and investment in the Asia Pacific or whether future trade liberalization will be confined primarily to bilateral free-trade agreements or multilateral trade negotiations under the World Trade Organization

Automobile Domestic Content Requirements

In response to the lowest drop of American produced automobile sales in two decades and other related conditions, legislation has been introduced that would impose domestic (local) content ratios for automotive vehicles. These would require that cars and trucks sold in the United States in large quantities contain a certain percentage of American parts and labor

North Korean Counterfeiting of U.S. Currency

The purpose of this report is to provide a summary of what is known from open sources on the Democratic People's Republic of Korea's (DPRK or North Korea), alleged counterfeiting of U.S. currency, examine North Korean motives and methods, and discuss U.S. interests and policy options