The U.S.-Singapore Free Trade Agreement

CRS Report for Congress
The U.S.-Singapore
Free Trade Agreement
Updated June 15, 2004
Dick K. Nanto
Specialist in Industry and Trade
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

U.S.-Singapore Free Trade Agreement
Summary
On September 4, 2003, President Bush signed the U.S.-Singapore Free Trade
Agreement (P.L. 108-78) into law in a White House ceremony. The agreement went
into effect on January 1, 2004. In late July 2003, the United States-Singapore Free
Trade Agreement Implementation Act had passed the House by a vote of 272-155
and the Senate by a vote of 66-32. The Free Trade Agreement (FTA) will, with a
phase-in period, eliminate tariffs on all goods traded between them, cover trade in
services, and protect intellectual property rights. In July 2003, the House Ways and
Means Committee, Senate Finance Committee, and House and Senate Judiciary
Committees held mock markups on the draft implementing legislation. On July 15,
the United States-Singapore FTA Implementation Act (H.R. 2739 (Delay) and S.

1417 (Grassley)) was introduced and by July 17 had received committee approval.

The agreement has received support from the business community and
consumer organizations but has been criticized by labor and some environmental
interests. Some of the specific concerns raised deal with the restrictions on penalties
for unresolvable disputes over labor and environmental issues, the Integrated
Sourcing Initiative, potential capital controls, temporary visas, and access for U.S.
exports of chewing gum. A basic policy issue with respect to the FTA is whether the
United States should pursue free trade and investment relations on a bilateral basis
rather than maintaining existing trade and investment practices on both sides or
pursuing more liberalized trade relations through other means. Also at issue is the
extent to which the FTA language should be used as a model for other agreements.
Negotiations for the U.S.-Singapore Free Trade Agreement were launched under
the Clinton Administration in December 2000. The FTA would be 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 has broken new ground in
electronic commerce, competition policy, and government procurement. It also
includes what the U.S. Trade Representative reportedly considers to be major
advances in intellectual property protection, environment, labor, transparency,
customs cooperation, and transshipments.
The U.S.-Singapore FTA required congressional implementation under
expedited Trade Promotion Authority legislative procedures. It continues the trend
toward greater trade liberalization and globalization, contains a new approach to
imposing penalties for unresolvable environmental and labor disputes; and may affect
certain trade flows that would, in turn, affect U.S. businesses.
Since Singapore is a relatively small economy, the economic effects of the U.S.-
Singapore Free Trade Agreement, by themselves, are not likely to be great. The
debate over implementation of the FTA is falling between business and free trade
interests who would benefit from more liberalized trade, particularly in services, and
labor or anti-globalization interests who oppose 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 have generated debate. This report will be updated as circumstances warrant.

Contents
Legislative Procedures..............................................4
Background ......................................................5
Provisions of the Agreement.........................................9
Trade in Goods................................................9
Rules of Origin...............................................11
Trade in Services.............................................13
U.S. Banks..............................................14
U.S. Insurance Companies..................................14
Securities and Related Financial Services......................14
Express Delivery Services..................................14
U.S. Professionals........................................14
Telecommunications Market................................15
E-Commerce and Digital Products...........................15
Investment ..............................................16
Intellectual Property Rights (IPR)............................17
Competition Policy.......................................19
Government Procurement..................................19
Customs Procedures.......................................19
Temporary Business Personnel and Workers...................19
Labor and Environmental Provisions..............................22
Environment .............................................22
Worker Rights...........................................22
Joint Committee..............................................23
Consultations ................................................23
Dispute Settlement............................................23
Capital Controls..............................................24
Budgetary Impact.............................................26
Entry into Force..............................................26
Termination .................................................26
Issues ..........................................................26
Legislative Activity...............................................33
List of Tables
Table 1. U.S. Merchandise Trade Balances With Singapore, 1999-2002, by
Major Commodity Category.....................................6
Table 2. U.S. Import Duties and Average Tariff Rates on Commodities
Imported From Singapore, 2002..................................8
Table 3. Estimated Revenue Losses to the Federal Government from
Implementing the U.S.-Singapore Free Trade Agreement..............26

Two-digit Harmonized System Commodity Codes 2000-2002..........35
Appendix B. U.S. Exports to Singapore by Two-digit Harmonized
System Commodity Codes, 2000-2002............................39
Appendix C. Reserved Service Sectors/Activities (Subject to
Restrictions, Licensing, Local Presence Requirements, etc.) for the
United States and Singapore Under the U.S.-Singapore Free Trade
Agreement ..................................................43

U.S.-Singapore Free Trade Agreement
On September 4, 2003, President Bush signed the U.S.-Singapore Free Trade
Agreement (P.L. 108-78) into law in a White House ceremony. The agreement went
into effect on January 1, 2004. In late July 2003, the United States-Singapore Free
Trade Agreement Implementation Act had passed the House by a vote of 272-155
and the Senate by a vote of 66-32. The Free Trade Agreement (FTA) will, with a
phase-in period, eliminate tariffs on all goods traded with Singapore, cover trade in
services, and protect intellectual property rights. In July 2003, the House Ways and
Means Committee, Senate Finance Committee, and House and Senate Judiciary
Committees held mock markups on the draft implementing legislation. On July 15,
the United States-Singapore Free Trade Agreement Implementation Act (H.R. 2739
(DeLay) and S. 1417 (Grassley)) were introduced and by July 17 had received
committee approval.
On January 30, 2003, the White House notified Congress of its intent to enter
into the FTA.¹ As required under Trade Promotion Authority (TPA or fast-track)
procedures, this notification was done more than 90 days prior to the May 6, 2003
signing of the agreement. The U.S. Trade Representative (USTR) released the text²
of the agreement and accompanying side letters on its website. Among the 31
Administration trade advisory committees, only the Labor Advisory Committee did
not endorse the FTA, although several of the committee reports were neutral, offered
no majority opinion, were split on certain provisions, or presented dissenting views.³
Negotiations for the U.S.-Singapore Free Trade Agreement were launched under⁴
the Clinton Administration in December 2000 and continued under the G.W. Bush
Administration. The FTA was the fifth such agreement the United States had signed
and the first with an Asian country. It continues a push by both administrations to
open markets abroad for U.S. exports and corporate activity. The Clinton
Administration emphasized U.S. access to “Big Emerging Markets”; the Bush
Administration has emphasized the strategy of “competitive liberalization” that, in
turn, is based on an overall trade philosophy that links a free enterprise international
economic policy with U.S. foreign policy (particularly counter-terrorism) as well as
its attempts to foster a dynamic and competitive American economy through

¹ The White House. Notice of Intention to Enter Into a Free Trade Agreement with
Singapore, January 30, 2003. (H. Doc. 108-29) This action was pursuant to sections

2103(a) and 2105(a) of the Trade Act of 2002 (P.L. 107-210).

² Available at [http://www.ustr.gov].
³ U.S. Trade Representative. US - Singapore Free Trade Agreement, Excerpts from Trade
Advisory Committee Reports. c. February 2003.
[http://www.ustr.gov/new/fta/Singapore/ac-excerpts.pdf]
⁴ For information on U.S.-Singaporean relations, see CRS Report RS20490, Singapore:
Background and U.S. Relations.

unregulated markets. Competitive liberalization means that the Administration is
pursuing trade liberalization on global, regional, and bilateral fronts. In doing so, it
is attempting to create a competition in liberalization under which those countries
ready to take the actions necessary to enter into a FTA with the United States can do
so. This then sets up a competition in which others follow or are left behind.⁵
As initiated, the U.S.-Singapore FTA was to be modeled after the U.S.-Jordan
FTA and is to eliminate tariffs on all goods over time and cover substantially all
services sectors.⁶ According to the U.S. Trade Representative, the FTA has broken
new ground in electronic commerce, competition policy, and government
procurement. It also includes what the USTR reportedly considers to be major
advances in intellectual property protection, environment, labor, transparency,
customs cooperation, and transshipments.⁷
The U.S.-Singapore FTA is of interest to Congress because (1) it required
congressional approval under expedited legislative procedures as established in P.L.
107-210 which granted the President Trade Promotion Authority; (2) it continues the
trend toward greater trade liberalization and globalization; (3) it contains a new

⁵ Zoellick, Robert B. So What Is There to Cover? Globalization, Politics, and the U.S.
Trade Strategy. Address to the Society of American Business Editors and Writers, Phoenix,
Arizona, April 30, 2002.
⁶ Changes in tariff rates are in U.S. International Trade Commission. Modifications to the
Harmonized Tariff Schedule of the United States to Implement the United States-Singapore
Free Trade Agreement, USITC Publication 3651, December 2003.
⁷ Rahil, Siti. U.S., Singapore Strike FTA Deal. Kyodo News Service, November 19, 2002.

approach to handle environmental and labor disputes; (4) it may affect certain trade
flows that would, in turn, affect U.S. businesses, particularly import-competing
industries, such as electronics equipment and other machinery; and (5) parts of the
FTA may be used as a model for agreements with other nations. Some of the specific
issues in the FTA also have been disputed.
Some observers see a U.S.-Singapore FTA as a step toward realization of the
Asia Pacific Economic Cooperation (APEC) forum’s “Bogor Vision,”under which
the United States and APEC’s other 21 members are working toward “free and open
trade in the Pacific.” It also is in accord with the Enterprise for ASEAN Initiative,
a new trade initiative with the Association of Southeast Asian Nations in which the
United States has offered the prospect of FTAs with those countries committed to
economic reforms and openness. Since the FTAs with Singapore (and Chile), the
United States has signed or is beginning FTA negotiations with Morocco, South
African Customs Union, Australia, five nations of Central America, Bahrain, and
Thailand.
In March 2002, the U.S.-ASEAN Business Council and the U.S. Chamber of
Commerce announced the formation of a U.S.-Singapore FTA Business Coalition
with 75 members and chaired by Boeing, ExxonMobil, and UPS to support the FTA.⁸
In Congress, the Singapore Congressional Caucus was formed in 2002 with
Representative Curt Weldon and Representative Solomon P. Ortiz as Co-chairs. As
of early 2003, it included 59 Members and Delegates of the House of
R epresent at i v es.
General opposition to the FTA is primarily from labor, anti-globalization, and
some environmental interests. Specific provisions also are were debated, particularly
if those provisions were to be used as a template for future FTAs with other nations.
The AFL-CIO, for example, opposes additional FTAs in general. Its position (that
reflects certain concerns of its member labor unions) is that free trade agreements
(such as the North American Free Trade Agreement) have cost hundreds of thousands
of American jobs and have eroded the bargaining power of workers. The AFL-CIO
also contends that free trade has led to wholesale destruction of the environment in
many developing countries and has widened the income gap between the world’s
richest and poorest citizens.⁹ The specific provisions in the agreement that were
disputed, such as the temporary business visas, Integrated Sourcing Initiative,
chewing gum, and capital controls, are discussed later in this report.
In June 2003, the U.S. International Trade Commission (ITC) released the
results of its investigation into the probable economic effects of a U.S.-Singapore
FTA.¹⁰ It concluded that the economy-wide effects on U.S. trade, production, and
economic welfare of the FTA tariff reductions are likely to be negligible to very

⁸ See U.S.-Singapore FTA Business Coalition at [http://www.us-asean.org/ussfta/index.asp].
⁹ AFL-CIO. The Cost of Unfair Trade. c2003.
[http://www.aflcio.or g/issuespolitics/gl obaleconomy/trade.cfm] .
¹⁰ U.S. International Trade Commission. U.S.-Singapore Free Trade Agreement: Potential
Economy and Selected Sectoral Effects, USITC Publication 3603, June 2003,
[http://www.usitc.gov/wai s/reports/arc/w3603.htm] .

small. The report explained that this is not an unexpected finding given the open
trade relationship, small trade and bilateral investment flows relative to U.S. trade
and investment worldwide, and Singapore’s small economy relative to that of the
United States. At the sectoral level, the report concluded that some sectors of the
U.S. economy likely would experience increased import competition from Singapore,
while other sectors likely would experience increased export opportunities in
Singapore. However, any such increases would be from a very small base, given
Singapore’s small economy and small market size, and thus have a minimal impact
on production, prices, or employment in corresponding U.S. sectors. By the year

2016, the ITC estimated the effects to be greater for U.S. exports of vegetables, fruits,

and nuts; meats; and other processed foods. For U.S. imports, impacts most likely
would be greater for electronic equipment and other machinery and equipment. U.S.
imports of textiles, apparel, and leather products were estimated not likely to increase
significantly because of the requirements for rules of origin in the FTA.
Legislative Procedures
The act providing Trade Promotion Authority (TPA) to the President (P.L. 107-
210) contained certain consultation and notification requirements in order for
international trade agreements to be considered by Congress under expedited¹¹
procedures. The requirements include the following:
^!at least 90 calendar days before entering into a trade agreement, the
President must notify Congress of the intent to enter into the¹²
agreement;
^!at least 90 calendar days before entering into the trade agreement,
the President must notify the revenue committees of possible
changes to U.S. trade remedy laws;
^!no later than 30 days after the President notifies Congress of the
intention to enter into a trade agreement, private sector advisors
must submit their reports on the agreement;
^!within 60 days of entering into a trade agreement, the President must
submit to Congress a description of changes to existing laws; and
^!not later than 90 days after the President enters into an agreement,
the ITC must submit a report assessing the likely impact of the
agreem ent .¹³

¹¹ This section is from the CRS Trade Briefing Book, “Trade Promotion Authority (Fast-
Track Authority for Trade Agreements),” by Lenore Sek.
¹² President George W. Bush. Message to the Congress of the United States, Jan. 29, 2003.
¹³ U.S. International Trade Commission. U.S.-Singapore Free Trade Agreement: Potential
Economy and Selected Sectoral Effects, USITC Publication 3603, June 2003,
(continued...)

Since the implementing bill and FTA agreement cannot be amended, the House
Ways and Means and Senate Finance Committees and House and Senate Judiciary
committees held mock (non-markup) markups with Administration representatives
as witnesses to make changes to the draft implementing legislation. Non-markup
markups are essentially the same as usual markups except they focus on draft
legislation rather than formally introduced bills.
Once the implementing bill met the requirements under TPA, it was considered
under the following expedited procedures:
^! the implementing bill is to be introduced in each house on the first
day each house meets after the President submits his draft bill;
^! the bill is referred to the committees of jurisdiction, which have 45
days of session to report the bill; otherwise they are automatically
discharged. However, since bills to implement trade agreements are
usually revenue bills, the Senate committees must report the House
bill and, for that reason, have an addition 15 days of session to report
the bill;
^!floor consideration is limited to 20 hours, equally divided and
controlled, and each house must complete floor action within 15
days of session;
^!no amendments may be offered to the implementing bill in
committee or on the floor.
Background
Singapore is a city state located in Southeast Asia at the southern tip of Malaysia
and across the Strait of Malacca from Indonesia. It has a population of 4.4 million,
an area roughly 3.5 times the size of the District of Columbia, gross domestic product
(GDP) of about $88 billion, and per capita income of about $20,600. It is a major
trading country whose imports and imports each generally exceed its GDP.
Singapore has been a major proponent of trade liberalization and supports the U.S.
security role in Asia.
Singapore is America’s largest trading partner in Southeast Asia with two-way
trade of $31.7 billion and a U.S. bilateral merchandise trade surplus in 2003 of $1.4
billion (same as the $1.4 billion in 2002), a reversal from the deficit of $1.4 billion
in 2000. The United States generally runs a surplus in services trade with Singapore.^th
Singapore is the 11 largest export market for the United States with $16.6 billion
in merchandise exports in 2003. It is the 17^th largest source for goods imported into
the United States with $15.1 billion in 2003. The United States is Singapore’s

¹³ (...continued)
[http://www.usitc.gov/wai s/reports/arc/w3603.htm] .

second largest trading partner (after Malaysia — Japan is third). As shown Table 1,
in bilateral trade by sectors, the United States runs surpluses with Singapore in
aircraft; electrical machinery; plastic; mineral fuel; optical instruments,
miscellaneous chemical products; dyes, paints, and putty; articles of base metals, and
iron and steel products. The U.S. incurs deficits with Singapore in machinery;
organic chemicals; a special other category; knit apparel; special other import
provisions; fish and seafood; woven apparel; and books and newspapers.
Table 1. U.S. Merchandise Trade Balances With Singapore,
1999-2002, by Major Commodity Category
(Million dollars)
Commodi ty/Year 2000Balance 2001Balance 2002Balance 2003Balance
Total Bilateral Trade Balance-1,3722,6521,4291,422
Machinery -5,020 -3,611 -3,848 -3,381
Organic Chemicals-231-463-1,190-1,808
Special Other Class. Provisions-602-463-421-391
Knit Apparel-260-228-227-228
Special Import Provisions-116-94-88-91
Books/newspaper/ma nuscripts -35 -46 -42 -52
Fish and Seafood-56-49-48-42
Woven Apparel-82-58-47-29
Tools, Cutlery of Base Metals51334535
Edible Fruits and Nuts42404757
Soap, Wax, Etc; Dental Prep.45395060
Paper, Paperboard84596051
Vehicles, Not Railway41916776
Photographic/Cinema togr aphic 104 83 95 83
Perfumery, Cosmetics, Etc.53605292
Inorgan.Chemicals/Rare Earths71739293
Aluminum 67 25 115 105
Iron and Steel Products959196112
Misc. Articles of Base Metal325458116
Tanning, Dye, Paint, Putty8268103120
Misc. Chemical Products341259285309
Optical, Photo, Medical, Instr. 655299369395
Mineral Fuel Oil-47264443363
Plastic 602 504 527 490
Machinery Electrical1,1741,4291,4081,773
Aircraft, Spacecraft7823,4752,7662,550
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^di^gⁱ^t^H^a^rm^onⁱ^{zed S}^y^s^t^em^C^odes^.

Some 1,600 U.S. companies and close to 20,000 American citizens are located
in Singapore.¹⁴ Many U.S. multinational corporations use Singapore as a regional
headquarters and base to export around the world. The United States is Singapore’s
largest foreign direct investor, while Singapore is the second largest Asian investor
in the United States after Japan. As of the end of 2002, Singapore accounted for
$61.4 billion in American direct investment (up from $26.7 billion in 2001) or 4.0%
of total U.S. direct investment abroad. For 2002, American direct investment
outflows of capital into Singapore totaled $11.4 billion out of total U.S. capital
outflows of $119.7 billion.¹⁵
Even before the FTA, Singapore already had 99% free trade. Only beer and
certain alcoholic beverages were subject to import tariffs. Singapore, however, does
impose high excise taxes on distilled spirits and wines, tobacco products, and motor
vehicles (which are all imported). These are aimed at discouraging consumption for
environmental and health purposes. The government also bans chewing gum (it
caused subway doors to jam). These practices are addressed in the FTA.
Singapore has implemented a free trade agreement with New Zealand (effective
January 1, 2001) and with European Free Trade Area (effective January 1, 2003 that
includes Iceland, Norway, Switzerland, and Liechtenstein), and in January 2002
concluded one with Japan that excludes agricultural products. The country also has
completed FTA negotiations with Australia (signed on February 17, 2003) and is
negotiating with Mexico (begun in July 2000) and Canada (begun October 2001) and
on November 14, 2002, established a study group to explore a FTA with South
Korea.
As a member of ASEAN, Singapore is a participant in The Framework
Agreement on Comprehensive Economic Co-operation between ASEAN and the
People’s Republic of China (signed November 4, 2002). The Framework Agreement
sets out how ASEAN and China are to cooperate in economic liberalization as well
as economic cooperation. It marks the first stage of tariff reductions under the
ASEAN-China FTA under which tariffs are to be reduced or eliminated by 2010 for
ASEAN-6 (Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Brunei),
and 2015 for the newer ASEAN countries of Cambodia, Laos, Burma (Myanmar) and
Vietnam.¹⁶
As for the United States, it also has low trade barriers except for certain
protected sectors, such as light trucks and textiles and apparel. As shown in Table
2, in 2002, the United States collected an estimated $87.5 million in duties on
imports from Singapore of $14,115.8 million for an average U.S. duty of 0.6%. This
low average tariff comes from a combination of low duties on most products and

¹⁴ US-ASEAN Business Council Interview with United States Ambassador to Singapore, Mr
Frank Lavin and Singapore Ambassador to the United States Chan Heng Chee, January 28,

2003. Available at [http://www.us-asean.org/Singapore/fta_interview.asp].

¹⁵ U.S. Bureau of Economic Analysis. U.S. Direct Investment Abroad: Country and Industry
Detail for Capital Outflows, 2002. [http://www.bea.doc.gov/bea/di/usdiacap.prn]
¹⁶ Singapore. Ministry of Trade and Industry. ASEAN and the People’s Republic of China.
[ ht t p: / / www.mt i .gov.sg/ publ i c / FT A/ f r m_FT A_Def aul t .asp?si d=143] .

relatively high duties on a few protected products. On knit apparel, for example, the
United States collected $43.4 million for an average duty of 18.6% and on woven
apparel collected $8.5 million for an average duty of $16.3%. Average duties on
miscellaneous food items at 7.3% and on plastics at 5.4% also were relatively high.
On electrical machinery and equipment, duties averaged only 0.3% and on machinery
0.1%. Other duties fell in the range of 0.4 to 2.4%. The elimination of U.S. import
duties under the FTA, therefore, would primarily affect duties on imports of apparel,
miscellaneous food items, and to a lesser extent plastics.
Table 2. U.S. Import Duties and Average Tariff Rates on
Commodities Imported From Singapore, 2002
(Percent and Million Dollars)
HSCommodity DescriptionAverageDutyDutiesCollected
Total Singapore0.6%$87.5
61Knit Apparel 18.6 43.4
98Special Other1.0 9.1
62Woven Apparel16.3 8.5
85Electrical Machinery and Equipment0.3 6.0
84Machinery0.1 4.1
39Plastics 5.4 3.9
90Optical, Medical Instruments0.4 3.1
27Mineral Fuels, Oils, etc.1.6 2.5
29Organic Chemicals0.1 1.0
87Vehicles, not Railway2.4 0.8
38Miscellaneous Chemical Products2.4 0.8
21Miscellaneous Food7.3 0.6
40Rubber 2.2 0.5
^Source:^{Data f}^r^o^m^{U.S. I}ⁿ^terⁿ^atioⁿ^a^{l T}^r^ad^{e Co}^m^mⁱ^ssioⁿ
The United States already has free trade agreements with Canada, Mexico,
Israel, and Jordan and is negotiating FTAs with Central America, Australia,
Morocco, the Southern Africa Customs Union, and Bahrain. The United States also
is a member of APEC, an organization that is pursuing free trade and investment in
the Pacific region, and has been in negotiations with 33 other Western Hemisphere
countries to establish a Free Trade Area of the Americas. Given the trend toward
negotiating more FTAs, the agreement with Singapore would give that country
essentially the same status as the other nations who already benefit from (or may
benefit from) free trade with the United States.

As for investment, Singapore generally has an open investment regime. At the
end of 2002, the stock of U.S. foreign direct investment (FDI) in Singapore totaled
$61.4 billion (on a historical-cost basis). U.S. FDI in Singapore is concentrated
largely in manufacturing (mostly in industrial machinery and equipment and
electronics), finance, and petroleum.¹⁷ As of 2002, Singapore had a net direct
investment position in the United States of $2.9 billion — down from $3.5 billion in
2001. Most is in manufacturing, real estate, depository institutions, and wholesale
t rade.¹⁸
Provisions of the Agreement
The following information on the specifics of the agreement are primarily from
its text and from news and other reports as well as information provided by the U.S.
Trade Representative and Singapore Ministry of Trade and Industry.¹⁹ The
agreement would establish a free trade area between the United States and Singapore
consistent with the rules and obligations under the World Trade Organization.
Trade in Goods
Singapore is to apply zero tariffs immediately upon entry into force of the
Agreement on all U.S. products, including beer and stout — the only items that had
been subject to tariff protection (Article 2.2, Annex 2C). U.S. tariffs on 92% of
Singaporean goods are also to be eliminated immediately with remaining tariffs
phased out over eight years (Annex 2B). The sectors with the most benefit to
Singapore include electronics, chemicals and petrochemicals, instrumentation
equipment, processed foods, and mineral products.
Singapore agreed to allow the importation of chewing gum from the United
States with therapeutic value for sale and supply subject to laws and regulations
relating to health products (Article 2.11). This opens the way for imports of
therapeutic types of American gum, possibly such as teeth whitening and nicotine
gum designed to aid in smoking cessation, to be sold there — probably through
pharmacies. Some news reports had indicated that prescriptions would be required
to buy the gum, but that provision does not appear in the text of the agreement, and
the Singapore government reportedly agreed that it would not require prescriptions.
Gum has been banned in Singapore since 1992 as a measure to keep the city clean

¹⁷ U.S. Bureau of Economic Analysis. U.S. Direct Investment Abroad, Survey of Current
Business, September 2002, pp. 68-97.
¹⁸ U.S. Bureau of Economic Analysis. Foreign Direct Investment in the United States,
Survey of Current Business, September 2002, pp. 38-67.
¹⁹ U.S. Trade Representative. Free Trade With Singapore, Trade Facts. December 16, 2002.
On Internet at [http://www.ustr.gov]. Singapore. Ministry of Trade and Industry.
Information Paper on the US-Singapore Free Trade Agreement (USSFTA), December 16,

2002. On Internet at [http://www.mti.gov.sg/public/home/frm_Mti_Default.asp].

and subways safe.²⁰ U.S. interests have argued for liberalized sales of sugarless gum
also.
Under the FTA, Singapore also is to harmonize its excise taxes on imported and
domestic distilled spirits (Article 2.9) (to be carried out in stages and completed by
2005). High excise taxes on imported alcoholic beverages was considered by the
United States to be the equivalent of an import duty.
For textiles and apparel (Chapter 5, Article 3.17), under the FTA, there is an
immediate elimination of tariffs for products that meet the yarn forward rule of
origin. This requires the products to be made from U.S. and/or Singaporean
originating yarn, with limited exceptions. For imports into the United States, all
other assembly processes must be carried out in Singapore. (See “Rules of Origin”
below.) The Singaporean industry is to work with U.S. yarn suppliers and is to
restructure their manufacturing operations in order to benefit from the FTA. A
“Tariff Preference Level” mechanism allows some amount of apparel exports from
Singapore to be exempted from the yarn forward rule for eight years. For such
exports, tariffs are to be phased out over five years. The United States also commits
to introduce more liberal rules of origin for textiles in the FTA assuming further
liberalization on rules of origin is achieved in the World Trade Organization. The
agreement provides for extensive monitoring and anti-circumvention commitments
by Singapore. The country is to establish a system to monitor the import, production,
and export of textiles and apparel goods to include reporting, licensing, and
unannounced factory checks so that only Singaporean textiles and apparel receive
tariff preferences from the United States.
The Advisory Committee on Textiles and Apparel did not formally object to the
prospect of eliminating duties and quotas on imports in this sector from Singapore.
The committee pointed out that U.S. import quotas in textiles and apparel are due to
be eliminated anyway on January 1, 2005 under the World Trade Organization
(WTO) Agreement on Textiles and Clothing. The committee also did not anticipate
that Singapore would become a major trading partner in the textile and apparel
sect or.²¹
Antidumping or countervailing duties that have been imposed through unfair
trade (such as unfair foreign pricing and government subsidies) or other domestic
laws would not be covered by the FTA (Footnote 7-1). As of March 2003, the only
antidumping duty order in place by the United States vis-a-vis products from
Singapore was for ball bearings.²²

²⁰ Singapore’s chewing gum ban comes unstuck. BBC News. November 20, 2002. Also,
interview with Singapore Embassy official, February 25, 2003.
²¹ The U.S.-Singapore Free Trade Agreement (FTA), Report of the Industry Sector Advisory
Committee on Textiles and Apparel (ISAC 15), February 2003. The WTO Agreement on
Textiles and Clothing is at [http://www.wto.org/english/tratop_e/texti_e/texti_e.htm].
²² Order date: May 15, 1989; continued on July 11, 2000. ITC Case No. A-396, Document
Case No. A-559-801, Group No. 61 filed under Section 731 of the Tariff Act of 1930
(antidumping)..

Rules of Origin
As indicated in the provisions for textiles and apparel above, the agreement
contains rules of origin designed to ensure that only U.S. and Singaporean goods
benefit from the agreement (Chapter 3). These rules are considered to be vital since
Singapore is a major transshipment port and also imports large quantities of primary
and intermediate products that subsequently become part of exported items. Only
exports with substantial transformation and value added done in Singapore can be
conferred “Singapore origin” and qualify for the FTA tariff rates.
In the industry review of the FTA, the Industry Sector Advisor Committee on
Textiles and apparel reported that the most significant interest and sharp division
among Committee members revolved around the rules of origin and the issue of
whether they might become a precedent for other trade agreements. The fiber, yarn
and textile members largely supported the requirements of a yarn forward rule that
grants benefits only to the signatories of the agreement, and not to third parties. They
believe this condition is an appropriate precedent for future trade agreements, and
since they felt it largely paralleled the North America Free Trade Agreement, it could
create parity among U.S. trading partners. The industry did, however, express
concerns over what they considered to be high tariffs levels in the stages of the
agreement that could undermine the origin rules in the early years of the agreement.²³
In contrast, apparel members largely expressed disappointment with the FTA,
because they considered the NAFTA rule of origin as restrictive and that it would be
made worse by additional complications and burdens. They argued that the rule of
origin discourages apparel trade among the beneficiary countries, which will in turn
diminish sales opportunities for fabric and trim suppliers. They urged that the rule of
origin in this FTA not be seen as a precedent for other FTAs.
The FTA provides for imported inputs used in the manufacture of the final
product within Singapore to be classified under a different tariff classification from
the final product. For some electronic products, the origin is Singapore if a certain
percentage of the value added (typically 35-60%) is done in Singapore. Overhead
activities performed in Singapore, such as R&D, design, engineering, purchasing, can
count toward the value added. Chemicals and petrochemicals are to be considered
of Singapore origin if a specified process occurs in Singapore — such as a specific
chemical reaction. In order to claim tariff preferences under the FTA, the U.S.
importer must declare that the good is of Singapore origin. Customs authorities on
both sides are to provide advance rulings on the origin of goods.
The FTA contains an Integrated Sourcing Initiative (ISI) [Article 3.2(1-2)],
a provision that applies to items that already trade duty free for the two countries
under the World Trade Organization’s Information Technology Agreement (signed
by 29 nations). The integrated sourcing initiative also includes certain medical
devices. The FTA list of products under the initiative comprise 155 line items from
the tariff code and include products, such as automatic data processing machines,

²³ The U.S.-Singapore Free Trade Agreement (FTA), Report of the Industry Sector Advisory
Committee on Textiles and Apparel (ISAC 15), February 2003.

magnetic discs, integrated circuits, video cameras, optical fibers, semiconductor
manufacturing machinery, network equipment, and instruments and appliances used
in medical sciences. Such products are to be treated as being of Singapore origin
when they are shipped from Singapore. Qualifying information technology and
medical components manufactured on the Indonesian islands of Batam or Bintan, in
particular, and exported to the United States either in products assembled in
Singapore or through that country would be considered to be of Singapore origin if
they met the rules of origin requirement in the FTA. This initiative was included at
the request of the U.S. side and is designed to help American companies capture the
complementarities between Singapore and its suppliers and to eliminate extra
paperwork, fees, and red tape.²⁴ It would have no effect on duties paid, but it would
allow the articles to escape the U.S. customs user fees of about 0.23% of the value
of the import.
Critics of the ISI as originally drafted pointed out, however, that since the FTA
text did not restrict the application of the provision to the two Indonesian islands of
Batam and Bintan, it potentially could be open to any nation, including China. In
response to this concern, some language dealing with the ISI was deleted before the
final agreement was signed. The draft language was in Article 3.2 of the agreement
and referred to Annex II that in the final text is referred to as Annex 3B. It said, “A
good listed in Annex II shall be considered an originating material for purposes of
satisfying the requirements specified in Annex I” [rules of origin]. That sentence is
absent in the final text. The final text states only that “Each Party shall provide that
a good listed in Annex 3B is an originating good when imported into its territory
from the territory of another Party. [Article 3.2 (1)]. This is interpreted by the U.S.
Trade Representative to mean that in order for a third Party to take advantage of the
ISI, it would have to ship a qualifying product from the United States to Singapore
to be incorporated into a product subject to the regional content requirement and then
shipped back to the United States.
Labor interests have also objected to this integrated sourcing initiative because
the labor, environmental, or other provisions in the FTA would not apply to factories
located outside of Singapore. Indonesia also would not be required to provide any
reciprocal access to U.S. companies. There additionally is concern that the sourcing
initiative may attract more U.S. investment to Indonesia to take advantage of the low
labor and other costs there. The FTA also states that within six months after entry
into force of the agreement, the Parties are to meet to explore the expansion of the
product coverage covered by the sourcing initiative [Article 3.2(2)].²⁵ The
implementing legislation establishes the need for congressional approval for the
expansion of the list of products covered under the Initiative.

²⁴ U.S. Trade Representative. USTR Zoellick to Visit China and Japan April 8-11. Press
Release 02-41, April 7, 2002. Also, interview by author with Singaporean Embassy official,
February 26, 2003.
²⁵ The U.S.-Singapore Free Trade Agreement. Report of the Labor Advisory Committee
for Trade Negotiations and Trade Policy (LAC), February 28, 2003. Polaski, Sandra.
Serious Flaw in U.S.-Singapore Trade Agreement Must Be Addressed. Carnegie
Endowment for International Peace Issue Brief. April 2003.

Under the FTA, the United States is to immediately waive its Merchandise
Processing Fee for all Singaporean exports (currently worth $30 million) and also
its Vessel Repair Duty for Singapore (currently worth $4 million).
Trade in Services
Since Singapore already is basically a free-trade state, much of the negotiations
over the FTA dealt with access to its services markets. The FTA accords substantial
market access across each other’s entire services sector, subject to few exceptions
that must be in writing — the so-called negative list approach (Chapter 8). The
exceptions deal with sectors that usually require government certification or licenses
(lawyers, accountants), involve governmental institutions (airports, provision of
social security, public hospitals, government corporations), or involve national policy
(atomic energy). Appendix C lists the sectors reserved by each country.
Each country is to give treatment to the other country’s services suppliers on a
par with its own suppliers or other foreign suppliers. This equal and non-
discriminatory treatment is to apply to both cross-border transactions (such as those
delivered electronically or through the travel of services professionals) and to direct
investments and foreign operations. The FTA also includes a mechanism to lock in
future liberalization of exempted measures, including exempted measures of
individual U.S. states.
In the FTA, traditional market access to services is supplemented by strong and
detailed disciplines on regulatory transparency. Regulatory authorities are to be
bound to high standards of openness and transparency, including consultations with
interested parties before issuing regulations, providing advance notice and reasonable
comment periods for proposed rules, and the publication of all regulations.
Market access commitments apply across a range of service sectors, including
but not limited to:
^!Financial services including banking, insurance, securities and
related services
^!Computer and related services
^!Direct selling
^!Telecommunications services
^!Audiovisual services
^!Construction and engineering
^! Tourism
^! Advertising
^!Express delivery
^!Professional services (architects, engineers, accountants, etc.)
^!Distribution services, such as wholesaling, retailing and franchising
^!Adult education and training services
^!Environmental services
^!Energy services
U.S. firms have the right to own equity stakes in entities that may be created if
Singapore chooses to privatize certain government-owned services. The benefits of

the FTA are to be extended to all U.S. and Singaporean companies that are not shell
companies, regardless of ownership.
U.S. Banks. The financial services chapter includes core obligations of non-
discrimination, most-favored nation treatment, and additional market access
obligations (Chapter 10). In Singapore, the current ban on new licenses for full-
service banks (qualifying full banks) is to be lifted within 18 months, and within
three years for “wholesale” banks that serve only large transactions. Licensed full-
service banks are to be able to offer all their services at up to 30 locations in the first
year and at an unlimited number of locations within two years. Locally incorporated
subsidiaries of U.S. banks are to be able to apply for access to the local automated
teller machine (ATM) network on commercial terms within 2.5 years. Branches of
U.S. banks are to obtain access to the ATM network in four years.
U.S. Insurance Companies. U.S. insurance firms are to have full rights to
establish subsidiaries, branches or joint ventures. Singapore is to end its prohibition
on foreign firms supplying insurance from outside of Singapore. U.S. firms are to
be able to sell marine, aviation and transport (MAT) insurance, reinsurance,
insurance brokerage of reinsurance and MAT insurance, and insurance auxiliary
services. A new principle of expedited availability of insurance services will mean
that prior regulatory product approval will not be required for insurance sold to the
business community. Expedited procedures are available in other cases when prior
product approval is necessary. Branches of Singapore’s insurance companies,
however, will still not be permitted to provide surety bonds for U.S. Government
contracts.
Securities and Related Financial Services. U.S. financial institutions
are to be able to offer financial services to citizens participating in Singapore’s
privatized social security system under more liberal requirements. U.S. firms are to
be able to provide asset and portfolio management and securities services in
Singapore through the establishment of a local office or by the acquisition of local
firms. U.S. firms are to be able to supply pension services under Singapore’s
privatized social security system with liberalized requirements regarding the number
of portfolio managers that must be located in Singapore. U.S.-based firms are to be
able to sell portfolio management services through a related institution in Singapore.
Singapore is to treat U.S. firms the same as local firms for the cross-border supply
of financial information, advisory and data processing services.
Express Delivery Services. The FTA provides for liberalization of express
delivery services and other related services (that are part of an integrated express
delivery system) (Article 4.10). This is intended to allow a more efficient and
expedited express delivery business in Singapore. Singapore commits that it will not
allow its postal service to cross-subsidize express letters with revenues from its
monopoly services.
U.S. Professionals. Singapore is to ease restrictions on U.S. firms creating
joint law ventures to practice in Singapore and is to recognize degrees earned from
four U.S. law schools for admission to the Singapore bar (Side letter on Legal
Services). Singapore is to reduce its board of director requirements (on the make-up
of boards of directors) for architectural and engineering firms and phase out capital

ownership requirements for land surveying services. The requirements for
registration and certification of patent agents in Singapore are to be liberalized. Both
sides are to engage in consultations to develop mutually acceptable standards and
criteria for licensing and certification of professional service providers, especially
with regard to architects and engineers (Article 15.9).
Telecommunications Market. The FTA includes a full range of
commitments on telecommunications services and provides for open markets²⁶
consistent with the regulatory regimes of the two nations (Chapter 9). Users of each
telecom network are guaranteed reasonable and non-discriminatory access including
submarine cable landing stations, with transparent and effective enforcement by the
telecommunications regulators. This is to prevent local firms from having
preferential or “first right” of access to telecom networks. U.S. phone companies are
to obtain the right to interconnect with networks in Singapore in a timely fashion and
on terms, conditions, and cost-oriented rates that are transparent and reasonable.
U.S. firms seeking to build a physical network in Singapore are to be granted non-
discriminatory access to buildings that contain telephone switches and submarine
cable heads. U.S. firms are to be able to lease elements of Singaporean telecom
networks on non-discriminatory terms and to re-sell telecom services of Singaporean
suppliers to build a customer base.
The FTA also opens rule-making procedures of Singapore’s telecom regulatory
authority and requires publication of inter-connection agreements and service rates.
Singapore is to make a commitment that when competition emerges in a telecom
services area, that area is to be deregulated. The agreement specifies that companies,
not governments, make technology choices, particularly for mobile wireless services,
thus allowing firms to compete on the basis of technology and innovation, not on
government-mandated standards. Both sides are to work toward implementing a
comprehensive arrangement for the mutual recognition of conformity assessment for
telecommunications equipment.
E-Commerce and Digital Products. (Chapter 14) Singapore and the U.S.
agreed to provisions on e-commerce (electronic, Internet-based commerce) that
reflect the issue’s importance in global trade and the principle of avoiding barriers
that impede the use of e-commerce. The agreement establishes explicit guarantees
that the principle of non-discrimination applies to products delivered electronically
(software, music, video, or text), there by providing equal treatment to U.S. firms
delivering digital products via the Internet. It also establishes a binding prohibition
on customs duties charged on digital products delivered electronically, such as
legitimate downloads of music, videos, software or text. For digital products
delivered on hard media (such as a DVD or CD), customs duties are to be based on
the value of the media (e.g., the disc), not on the value of the movie, music or
software contained on the disc or other carrier medium.

²⁶ In 1997, the United States dropped most of its restrictions on the entry of foreign firms
into U.S. non-broadcasting telecommunications and adopted an “open entry” standard for
firms from World Trade Organization member countries, such as Singapore.

The e-commerce text in the FTA makes binding a number of commitments that
are now only voluntary or temporary in the World Trade Organization. It affirms
that any commitments made related to services in the agreement also extend to the
electronic delivery of such services, such as financial services delivered over the
Internet. In essence, both sides agreed to the non-discriminatory treatment of digital
products and the permanent duty-free status of products delivered electronically.
This was the first time such commitments were included in an international trade
agreement and may set a precedent for services liberalization efforts in the WTO and
in other FTAs.
Investment. (Chapter 15) The agreement is to provide a secure, predictable
legal framework for investors operating in each other’s economy. All forms of
investment are protected under the agreement unless specifically exempted. U.S.
investors are provided treatment as favorable as local Singaporean investors or any
other foreign investor. Pursuant to U.S. Trade Promotion Authority, the agreement
draws from U.S. legal principles and practices to provide U.S. investors a basic set
of substantive protections that Singaporean investors currently enjoy under the U.S.
legal system.
Among the rights afforded to investors (consistent with those found in U.S. law)
are due process protections and the right to receive a fair market value for property
in the event of an expropriation, whether direct or indirect. The agreement prohibits
and removes certain performance-related requirements or restrictions on investors,
such as limitations on the number of locations or requiring an investor to export a
given level of goods and services as a condition for the investment.
The FTA ties investor protections to standards developed under customary
international law, but environmentalists and business representatives reportedly differ
on what this standard means and on whether it sets parameters that exceed or fall
short of the standard in U.S. law (which TPA or fast-track legislation bound
negotiators not to exceed). As for indirect expropriation, the FTA incorporates the
test used by the U.S. Supreme Court for regulatory taking. The Singapore FTA
differs from the various clarifications to the North America Free Trade Agreement
(NAFTA) in that it obligates Singapore and the United States to give investors
treatment in accordance with “customary international law” rather than in accordance
with “international law.” The latter was the formulation included in NAFTA which
has been read by NAFTA panelists to include obligations under other international
agreements such as the World Trade Organization. Such interpretations are explicitly
rejected in the Singapore FTA by inclusion of text which holds that a breach of other
provisions of the FTA or of other international accords does not constitute a violation
of the minimum standard of treatment. The FTA also incorporates language from the
clarification of NAFTA that says the customary international law minimum standard
of treatment of aliens is the standard that investors must be accorded and that
obligations in the agreement to provide “fair and equitable” treatment and “full
protection and security” do not create substantive obligations over and above that
standard.²⁷

²⁷ Treatment Standard for Investors Remains Problem in Singapore FTA. Inside U.S. Trade,
(continued...)

Another matter of considerable dispute during the negotiations was investor
rights. The issue concerned the recourse for investors should the government take
their property or affect their operations in a way that violates the agreement. The
FTA includes an investor-to-state mechanism under which investors aggrieved by
government actions that are in breach of obligations under the FTA have the right to
take the dispute directly to an international arbitration tribunal for resolution. This
is to provide an impartial and transparent procedure for dispute settlement.
Submissions to dispute panels and panel hearings are to be open to the public, and
interested parties are to have the opportunity to submit their views. Singaporean
investors who enter into investment agreements with the federal government, after
the entry into force of the FTA, are to be able to take applicable disputes directly to
international arbitration for resolution.
Intellectual Property Rights (IPR). (Chapter 16) According to the U.S.
Trade Representative, the protection of copyrights, patents, trademarks and trade
secrets under the FTA goes farther than previous free-trade agreements. The FTA
also enhances enforcement of intellectual property rights. Non-discrimination
obligations apply to all types of intellectual property. The FTA ensures government
involvement in resolving disputes between trademarks and Internet domain names
(important to prevent “cyber-squatting” of trademarked domain names). It also
applies the principle of “first-in-time, first-in-right” to trademarks and geographical
indicators (place-names) applied to products. This means that the first to file for a
trademark is granted the first right to use that name, phrase or geographical place-
name. It also streamlines the trademark filing process by allowing applicants to use
their own national patent/trademark offices for filing trademark applications.
The FTA ensures that only authors, composers and other copyright owners have
the right the make their works available online. Copyright owners maintain rights
to temporary copies of their works on computers. (This was aimed at protecting
music, videos, software, or text from widespread unauthorized sharing via the
Internet). Copyrighted works and phonograms are protected for extended terms,
consistent with U.S. standards and international trends. The FTA also contains anti-
circumvention provisions aimed at preventing the tampering with technologies (such
as embedded codes on discs) that are designed to prevent piracy and unauthorized
distribution over the Internet. It also ensures that governments use only legitimate
computer software (in order to set a positive example for private users). Singapore
is to prohibit the production of optical discs (CDs, DVDs or software) without a
source identification code unless authorized by the copyright holder in writing.
Under the FTA, protection for encrypted program-carrying satellite signals
extends to the signals themselves as well as the programming. This is designed to
prevent piracy of satellite television programming. Both sides agreed to criminalize
unauthorized reception and re-distribution of satellite signals. The FTA also contains
limited liability for Internet Service Providers (ISPs) — reflecting the balance struck

²⁷ (...continued)
March 14, 2003.

in the U.S. Digital Millennium Copyright Act²⁸ between legitimate ISP activity and
the infringement of copyrights. In essence, both sides are to provide immunity to
Internet service providers for complying with notification and take-down procedures
when material suspected to be infringing on copyright is hosted on their servers.
The FTA provides for a patent term to be extended to compensate for up-front
administrative or regulatory delays in granting the original patent, consistent with
U.S. practice. The grounds for revoking a patent are limited to the same grounds
required to originally refuse a patent. This is to protect against arbitrary revocation.
It also provides protection for patents covering biotech plants and animals.
Singapore is to accede to the International Convention for the Protection of New
Varieties of Plants. The FTA also provides for protection against imports of
pharmaceutical products without a patent-holder’s consent by allowing lawsuits when
contracts are breached.
Under the FTA, test data and trade secrets submitted to a government for the
purpose of product approval are to be protected against disclosure for a period of five
years for pharmaceuticals and 10 years for agricultural chemicals. The FTA also
closes potential loopholes to these provisions and is designed to ensure that
government marketing-approval agencies will not grant approval to patent-violating
products.
Under the FTA, there are criminal penalties for companies that make pirated
copies from legitimate products. The Singaporean government guarantees that it has
authority to seize, forfeit and destroy counterfeit and pirated goods and the equipment
used to produce them. IPR laws are to be enforced against traded goods, including
trans-shipments, to deter violators from using U.S. or Singaporean ports or free-trade
zones to traffic in pirated products. The FTA mandates both statutory and actual
damages under Singaporean law for IPR violations (as a deterrent against piracy) and
provides that monetary damages be awarded even if actual economic harm (retail
value, profits made by violators) cannot be determined. Singapore is to cooperate in
preventing pirated and counterfeit goods from being imported into the United States.
Another IPR related issue deals with licenses to copy patented drugs. The FTA
sharply restricts Singapore from using compulsory licenses to copy patented drugs
and sets up new barriers to the import of patented drugs sold at lower prices in third
countries. These provisions may strengthen protections for U.S. drug companies in
ways that were explicitly disallowed in the World Trade Organization by the Doha
declaration on intellectual property rights and public health.²⁹ Some also claim that
new limits on compulsory licensing of patented drugs could impede Singapore’s

²⁸ P.L. 105-304, Title II, Online Copyright Infringement Liability Limitation. 112 Stat. 2860
(Oct. 28, 1998).
²⁹ The Doha Declaration states that each member has the right to grant compulsory licences
and the freedom to determine the grounds upon which such licences are granted. See World
Trade Organization. Doha Ministerial. Declaration on the TRIPS Agreement and Public
Health. November 20, 2001.

ability to use cheaper generic alternatives. However, pharmaceutical industry
representatives reportedly have welcomed the agreement’s patent provisions.³⁰
Competition Policy. (Chapter 12) The FTA commits Singapore to enact a
law regulating anti-competitive business conduct and to create a competition
commission by January 2005. Specific conduct guarantees are imposed to ensure
that commercial enterprises in which the Singapore government has effective
influence will operate on the basis of commercial considerations and that such
enterprises will not discriminate in their treatment of U.S. firms. That is, Singapore
commits to maintain its existing policy of not interfering with the commercial
decisions of Government Linked Companies and also to provide annual information
on those with substantial revenues or assets.
Government Procurement. (Chapter 13) Under the FTA, both sides are
committed to allowing market access by service suppliers of the other country unless
specifically reserved (a “negative list” approach in which U.S. and Singaporean firms
are to gain nondiscriminatory access unless specifically excluded). The monetary
thresholds for when government procurement disciplines apply are lowered for all
procurement contracts for goods and non-construction services to $56,190 (102,710
Singapore dollars) and for construction procurement contracts to $6,481,000
(S$11,376,000). These amounts are adjusted biennially for inflation. Under the 1997
Government Procurement Agreement in the World Trade Organization, both
Singapore and the United States had already lowered their thresholds to $178,000 for
goods and non-construction services and to $6,850,000 for construction services.
Additional commitments by Singapore include strong and transparent disciplines on
procurement procedures (such as requiring advance public notice of purchases) as
well as timely and effective bid review procedures.
Customs Procedures. (Chapter 4) The U.S.-Singapore FTA is among the
first U.S. trade agreements with specific, concrete obligations on how customs
procedures are to be conducted. The agreement requires transparency and efficiency
in customs administration with commitments to publish customs laws and regulations
on the Internet and to ensure procedural certainty and fairness. Both parties agreed
to share information to combat illegal trans-shipment of goods. In addition, the
agreement contains specific language designed to facilitate clearance through
customs of express delivery shipments.
Temporary Business Personnel and Workers.³¹ (Chapter 11) The U.S.-
Singapore FTA creates separate categories of entry for citizens of each country to
engage in a wide range of business and investment activities on a temporary basis,
i.e., nonimmigrants. The FTA addresses four specific categories of temporary
nonimmigrant admissions currently governed by U.S. immigration law: business
visitors; treaty traders; intracompany transfers; and professional workers. These
categories parallel the visa categories commonly referred to by the letter and numeral
that denotes their subsection in §101(a)(15) of the Immigration and Nationality Act:

³⁰ U.S.-Singapore FTA Tightens Compulsory License Rules for Medicines. Inside U.S.
Trade, March 14, 2003.
³¹ Prepared by Ruth Ellen Wasem, Specialist in Social Legislation.

B-2 visitors, E-1 treaty traders, L-1 intracompany transfers, and H-1B professional
workers.³² Neither Party is to require labor certification or other similar procedures
as a condition of entry and is not able to impose any numerical limits on these
categories, with some exceptions noted for the professional workers (including a cap
of 5,400 per fiscal year).³³
The FTA states the desire to facilitate the temporary entry of persons fitting
these categories, provided the person complies with applicable immigration measures
for temporary entry (e.g., public health and safety as well as national security).
Singaporean citizens who are business visitors, for example, would be able to enter
the United States for business purposes on the basis of an oral declaration or letter
from the employer specifying the principal place of business — detailing in the FTA
an admissions policy not currently specified in statute.
Title IV of S. 1417/H.R. 2739 amended several sections of the Immigration and
Nationality Act (INA, 8 U.S.C.). Foremost, the bills amended §101(a)(15)(H) of INA
to carve out a portion of the H-1B visas — to be designated the H-1B-1 visa — for
professional workers entering through the FTA. In many ways the FTA professional
worker visa requirements parallel the H-1B visa requirements, notably having similar
educational requirements. The H-1B visa, however, specifies that the occupation
require highly specialized knowledge, while the FTA professional worker visa
specifies that the occupation require only specialized knowledge.
The bills also amend §212 of INA to add a labor attestation requirement for
employers bringing in potential FTA professional worker nonimmigrants that is
similar to the H-1B labor attestation statutory requirements. The additional
attestation requirements for “H-1B dependent employers” currently specified in §212
are not included in the labor attestation requirements for employers of the FTA
professional worker nonimmigrants.
S. 1417/H.R. 2739 contains numerical limits of 5,400 new entries per fiscal year
under the FTA professional worker visa from Singapore. The bills do not limit the
number of times that an alien may renew the FTA professional worker visa on an
annual basis, unlike H-1B workers who are limited to a total of six years. The bills
would count a FTA professional worker against the H-1B cap the first year he/she
enters and again after the fifth year he/she seeks renewal. Although the foreign
national holding the FTA professional worker visa would remain a temporary
resident who would only be permitted to work for any employer who had met the
labor attestation requirements, the foreign national with a FTA professional worker
visa could legally remain in the United States indefinitely.

³² For background, see CRS Report RS20916, Immigration and Naturalization
Fundamentals, and CRS Report RL31381, U.S. Immigration Policy on Temporary
Admissions, both by Ruth Ellen Wasem.
³³ For a discussion of the labor market requirements for employment-based visas, see CRS
Report RS21520, Labor Certification for Permanent Immigrant Admissions; CRS Report
RL30498, Immigration: Legislative Issues on Nonimmigrant Professional Specialty (H-1B)
Workers ; and CRS Report RS21543, Immigration Policy for Intracompany Transfers (L
Visas): Issues and Legislation, all by Ruth Ellen Wasem

On July 10, 2003, the House Judiciary Committee held a “mock” mark-up of the
USTR’s draft language. Chairman Sensenbrenner took the lead in stating that
“immigration policy does not belong in free trade agreements,” citing Congress’s
plenary authority over immigration policy in Article 1, §8 of the U.S. Constitution.
Members on both sides of the aisle expressed agreement with Chairman
Sensenbrenner’s position, with several Members going further to state that the draft
language was an “insult to Congress.” The House Judiciary Committee
recommended including the FTA professional workers in the H-1B nonimmigrant
visa and counting an FTA professional worker against the H-1B cap the first year
he/she enters and again after the fifth year he/she seeks renewal. These
recommendations are reflected in the legislation as introduced.
Title IV of S. 1417/H.R. 2739 also amended the INA to include citizens of
Singapore as E-1 treaty traders and E-2 treaty investors.
The USTR maintains that ensuring cross-border mobility of professionals and
other business persons is critical for U.S. companies in developing new markets and
business opportunities abroad. The USTR further argues that the temporary business
personnel provisions in the FTAs are not immigration policy because they only affect
temporary entry. The USTR points out that it issued a notice of intent to negotiate
provisions to facilitate the temporary entry of business persons in October 2001 and
that it briefed congressional staff on the FTA provisions on numerous occasions.
Others express concern that the USTR has overreached its negotiating authority
by including immigration provisions in the FTAs. Critics maintain that the USTR’s
assertion that temporary entry of foreign business personnel and professional workers
is not immigration policy is disingenuous. More generally, some point out that these
provisions could constrain current and future Congresses when they consider revising
immigration law on business personnel, treaty investors and traders, intracompany
transfers, and professional workers because the United States would run the risk of
violating the FTA.
The specific issue of FTA professional workers has sparked the most debate.
The Labor Advisory Committee, one of six private sector advisory committees for
the USTR, is critical of the provisions on the temporary entry of business personnel
and professional workers because it appears to enable workers from Singapore who
have no direct employment except a service contract to enter the United States.³⁴
Other have expressed concern that professional workers from Singapore would be
held to a less stringent standard than existing H-1B law (specialized knowledge
versus highly specialized knowledge) and that the stricter attestation requirements for
H-1B dependent employers would also be omitted.
The USTR argues that it is incorrect to assert that the labor attestations required
under the FTA would be less rigorous than the LCA called for under current U.S.
law. According to the USTR, the labor attestation required under the FTA also is to
be modeled after the LCA that the Department of Labor requires under the existing

³⁴ Report of the Labor Advisory Committee for Trade Negotiations and Trade Policy (LAC).
The U.S.-Chile and U.S.-Singapore Free Trade Agreements. February 28, 2003. p. 9-11.

H-1B visa program, and (as is the case under the H-1B program) fees may be
collected along with the labor attestations.³⁵ The USTR states that the labor
attestations, education and training fees, and numerical limits provisions have been
added to the FTAs in response to congressional concerns.
Issues surrounding legal authority to enforce immigration law also arose. Some
questioned whether §106 and §107 of the legislation would enable an international
panel to overrule decisions by officials in the Department of Homeland Security or
by the Attorney General to reject visa applicants from Singapore. USTR responds
that the panel that would be established by the FTA would be bi-national and would
only deal with cases brought by a Party to the agreement in which there is alleged to
be a pattern of violations.
Labor and Environmental Provisions
Environment. (Chapter 18) The U.S. Trade Representative states that the
agreement fully meets the environmental objectives set out by Congress in granting³⁶
the President Trade Promotion Authority (TPA). Environmental obligations are
part of the core text of the trade agreement. Both parties are to ensure that their
domestic environmental laws provide for high levels of environmental protection and
that they are to strive to continue to improve such laws. The agreement makes clear
that it is inappropriate to weaken or reduce domestic environmental protections to
encourage trade or investment. The agreement also requires that parties effectively
enforce their own domestic environmental laws. This obligation is to be enforceable
through the agreement’s dispute settlement procedures (see section on Dispute
Settlement).
Worker Rights. (Chapter 17) In the FTA, labor obligations are part of the
core text of the trade agreement. Both parties are to reaffirm their obligations as
members of the International Labor Organization, and they are to strive to ensure that
their domestic laws provide for labor standards consistent with internationally
recognized labor principles. The agreement also contains language that it is
inappropriate to weaken or reduce domestic labor protections to encourage trade or
investment. The agreement further requires parties to effectively enforce their own
domestic labor laws. This obligation is to be enforceable through the agreement’s
dispute settlement procedures (see section on Dispute Settlement).
The USTR claims that the FTA meets the labor and environmental objectives
set out by Congress in TPA legislation. The TPA (P.L. 107-210) lays out labor and
environmental objectives for trade negotiations [Section 2102(b)(11)]. Among them
are to ensure that a party to a trade agreement with the United States does not fail to

³⁵ Letter. U.S. Trade Representative to Mr. George Becker, Chair, Labor Advisory
Committee on Trade Negotiations and Trade Policy. c. March 2003.
³⁶ Trade Act of 2002 (P.L. 107-210). The act includes negotiating objectives that call for
negotiators to ensure that parties do not fail to effectively enforce their environmental laws
in a manner affecting trade and to make such failures subject to dispute settlement. Another
objective seeks language in trade agreements committing parties not to weaken
environmental laws to attract trade.

effectively enforce its environmental or labor laws, through a sustained or recurring
course of action or inaction, in a manner affecting trade between the United States;
to strengthen the capacity of U.S. trading partners to promote respect for core labor
standards; and to strengthen the capacity of U.S. trading partners to protect the
environment through the promotion of sustainable development. Some claim that the
FTA does not achieve these objectives.
The labor and other provisions in the FTA have been criticized by the AFL-CIO.
It claims that the agreement would likely lead to a deteriorating trade balance, lost
jobs, trampled rights and inadequate economic development.³⁷
Joint Committee
The Agreement establishes a joint committee to supervise the implementation
of the Agreement and to review the trade relationship between the Parties. The
Committee consists of the U.S. Trade Representative and Singapore’s Minister for
Trade and Industry or their designees. The Joint Committee is to meet once a year
in regular session and in special sessions within 30 days of a request by either
country. The Committee’s responsibilities include (among other tasks) reviewing the
functioning, operation, and implementation of the Agreement in the light of its
objectives; facilitating the avoidance and settlement of disputes arising under the
Agreement; considering and adopting any amendment to the Agreement, subject to
completion of necessary domestic legal procedures by each Party; issuing
interpretations of the Agreement; and considering ways to further enhance trade
relations between the Parties.
Consultations
The United States or Singapore may request consultations with the other Party
with respect to any matter that it considers might affect the operation of the
Agreement, and each commits to reply promptly to the request for consultations and
enter into consultations in good faith.
Dispute Settlement
All core obligations of the agreement, including labor and environmental
provisions, are to be subject to the dispute settlement provisions of the Agreement
(Chapter 20). The dispute panel procedures are considered by the negotiators to
contain high standards of openness and transparency and include:
^!Public hearings;
^!Public release of legal submissions by parties; and
^!Rights for interested third parties to submit views.

³⁷ Statement by AFL-CIO President John J. Sweeney on Report Finding Chile and Singapore
‘Free’ Trade Agreements Hurting American Economic Interests and Workers’ Rights in
U.S., Chile and Singapore, February 28, 2003.

The emphasis in the agreement is on promoting compliance through
consultation and trade-enhancing remedies rather than on trade sanctions or other
penalties for non-compliance. The agreement contains an enforcement mechanism
that includes monetary penalties to enforce commercial, labor, and environmental
obligations of the trade agreement.
The non-implementation phase [Article 20:7] of the dispute settlement
procedure is somewhat different for cases dealing with labor and the environment.
Up to the point where a dispute panel issues its report but the Party in violation does
not implement it, the procedures are the same regardless of the nature of the
complaint. In a case where a dispute panel finds that a Party has not conformed with
its obligations with respect to labor [Article 17:2.1(a)] or the environment [Article

18.2.1(a)], and the Parties are (a) unable to reach agreement on a resolution or (b)

have agreed on a resolution but the complaining Party considers that the other Party
has failed to observe the terms of the agreement, the complaining party may request
that the dispute panel be reconvened to impose an annual monetary assessment on the
other Party. The panel is to determine the amount of the monetary assessment within
90 days after it reconvenes not to exceed $15 million dollars annually (adjusted for
inflation after 2004 by the U.S. Producer Price Index). Some have argued that $15
million is too small an amount. Note that for other types of disputes, the monetary
assessments are to be set at a level equal to 50% of the level of the benefits the
dispute panel has determined to be of equivalent effect, or, if there is no such
determination, 50% of the level the complaining Party has proposed to suspend. If
the monetary assessment is not paid, the complaining party may suspend tariff
benefits under the Agreement up to the level the panel has determined. In 2002, the
United States collected $87.5 million in duties on imports from Singapore. Some of
these duties could be reimposed in order to collect an unpaid monetary assessment.
Capital Controls
The final issue that was negotiated in the FTA dealt with controls on capital
outflows and their relationship to the dispute settlement mechanism. In the 1997-99
Asian financial crisis, short-term capital fled countries, such as Thailand and South
Korea, and their governments could not defend their exchange rates. Portfolio
investors, not only lost asset value as stock markets declined in these countries, but
unless they could convert their local-currency investments into dollars, they also lost
when the currency depreciated. In addition to foreign investors, local wealth holders
also rushed to convert their liquid capital into foreign currencies. As a result, over
a short period of time the Thai baht and South Korean won lost 40% of their value,
while the Indonesian rupiah dropped nearly 70%. In the FTA negotiations over
capital controls, the Singaporean government reportedly wanted to retain the latitude
in policy to intervene to stem such catastrophic losses should a future crisis occur.
The language in the U.S.-Singapore FTA reportedly was patterned after that
contained in the sister U.S.-Chile FTA. The FTA breaks capital outflows into two
categories — outflows related to foreign direct investment (such as the repatriation
of profits, dividends, proceeds from the sale of an asset, and loan or bond payments)
and other capital outflows. If Singapore were to impose a restriction on outflows of
FDI-related capital, the FTA provides for a six-month “cooling off period” beginning
when the capital restriction was applied before an investor could challenge that

restriction and submit a claim for arbitration. Investors, however, could sue for full
damages.³⁸
For restrictions on other capital outflows (including short-term portfolio
investments and other liquid assets), the “cooling off period” would be one year. If
the restriction imposed did not “substantially impede” capital flows, then Singapore
would not be liable for any damages for 364 days after the measure was imposed. If
an investor won a dispute settlement case, any damages would be calculated
beginning the 365^th day. If the restriction did “substantially impede” capital flows,
then Singapore would be held liable from the date the measure was imposed.
In a side letter (dated March 7, 2003), U.S. Under Secretary of Treasury for
International Affairs John B. Taylor wrote to the Singapore Monetary Authority
providing more detail on the term “substantially impede transfers.”³⁹ He stated that
without attempting to exhaustively define the term, we agree, as a rebuttable
presumption, that restrictive measures on outward payments and transfers will
be deemed not to substantially impede transfers, if they are applied on a national
treatment and most-favored-nation basis, are price-based, are not confiscatory,
do not effectively prohibit or ban transfers over any period of time, do not
constitute a dual or multiple exchange rate practice, do not restrict the sale or
conversion of the assets to any other asset denominated in Singapore dollars, and
do not otherwise interfere with the investor’s ability to earn a market rate of
return in Singapore on the restricted assets. A measure will not be deemed to
substantially impede transfers by virtue of the fact that it relies on approval
procedures for outward payments and transfers, provided the approval
procedures are based on objective and transparent rules, and investors have an
alternative means of making payments and transfers through a price-based
mechanism.
The letter further states that
if a measure is found to “substantially impede transfers,” the investor will have
the burden of proving the existence and extent of diminution in its asset value as
a consequence of the measure. If an investor can only speculate that the
exchange rate would have been more favorable on the date when it was prepared
to transfer its funds than when the funds were transferred, and Singapore presents
evidence that the exchange rate could have been even less favorable at that time
had the measure not been imposed, the investor has not met its burden of proof.
The letter further states that “if a measure substantially impedes transfers, it shall not
prevent investors from earning a market rate of return in Singapore on any restricted
assets.”
Following approval of the FTA, the legal definition of “substantially impede”
is likely to be determined in actual dispute settlement cases. It could be expected,

³⁸ Article 15.15. See also: U.S.-Chile Agreement to Subject Capital Controls to Dispute
Settlement. International Trade Reporter, Vol. 19, December 19, 2002. P. 2165.
³⁹ For discussion, see Singapore-U.S. FTA Defines Rules on Short-Term Capital Flow
Restrictions. Inside U.S. Trade, March 14, 2003.

however, that a directive, such as that by Malaysia in 1998, that prohibited investors
from accessing their funds would be considered a substantial impediment.⁴⁰
Budgetary Impact
Since the FTA eliminates import tariffs on products from Singapore, it results
in reduced collections of import duties which become revenues for the federal
government. In the Bush Administration’s FY2004 budget, the estimated revenue
losses are as indicated in Table 3. The loss is estimated to be $20 million in FY2004,
and it would rise to $79 million in FY2008 for a total loss over the FY2004-2008
period of $268 million. The total duties collected on imports from Singapore
amounted to an estimated $110.2 million in 2000, $96.5 million in 2001, and $87.5
million in 2002.⁴¹
Table 3. Estimated Revenue Losses to the Federal Government
from Implementing the U.S.-Singapore Free Trade Agreement
(Million Dollars)
F Y 2004 F Y 2005 F Y 2006 F Y 2007 F Y 2008 Tot a l :F Y 2004-8
-20 -43 -58 -68 -79 -268
^Source:^{U.S. Of}^fⁱ^{ce of}^Man^a^g^e^m^eⁿ^t^an^{d B}^u^dg^et
Entry into Force
The Agreement came into force on January 1, 2004.
Termination
Either Party may terminate the Agreement by written notification to the other
Party, and such termination shall take effect six months after the date of the
notification.
Issues
A fundamental issue with respect to the U.S.-Singapore FTA was whether the
United States should pursue free trade and investment relations on a bilateral basis
with the island nation of Singapore rather than maintaining existing trade practices

⁴⁰ Ibid. In September 1998, Malaysia prohibited its domestic banks from lending to non-
residents and stockbrokers or from engaging in any swap or repurchase transactions with
non-residents. In addition, transactions in external ringgit accounts (particularly those in
Singapore) could only be made for the sale and purchase of Malaysian ringgit (not foreign
currency) assets, and balances could not be transferred among non-residents.
⁴¹ Underlying data from: U.S. International Trade Commission, Data Web.

on both sides or pursuing more liberalized trade relations through other means. Also
at issue has been the effects of these liberalized trade and investment flows on U.S.
employment, imports and exports as well as access by U.S. businesses to Singapore’s
markets in services.
The underlying issue of whether the United States should pursue more
liberalized trade and investment relations with Singapore dovetails into the larger
issue of globalization and its effects on the United States, particularly on labor and
wages. Those opposed to greater interaction with the global economy, perhaps to
include Singapore, generally point to increasing competition from imports, the
accompanying threat to economic security in certain industries, particularly labor-
intensive industries with significant U.S. production, the rising U.S. trade deficit, and
claimed negative effects of globalization (such as income maldistribution and
increased pollution from industrialization).
Among the 31 Administration trade advisory committees, only the Labor
Advisory Committee did not endorse the U.S.-Singapore FTA. The labor committee
rejected the proposed FTA (along with the U.S.-Chile FTA) stating that it repeated
“the same mistakes of the North American Free Trade Agreement” and would likely
“lead to the same deteriorating trade balances, lost jobs, trampled rights and
inadequate economic development that NAFTA created.”
The other 30 advisory committees, including the trade and environment policy
advisory committee, generally endorsed (or were neutral) on the agreement —
although there were dissenting opinions and reservations about particular
provisions.⁴² The key Advisory Committee on Trade Policy and Negotiations
strongly endorsed the agreement, stating that it believed the FTA strongly promotes
the economic interests of the United States and substantially achieves the overall and
principal negotiating objectives set forth in the Trade Act of 2002. The labor
representative on that committee, however, dissented, saying that it failed to meet the
objectives in a number of areas, including labor and environment.
As for the benefits of FTAs, those in favor of trade and investment
liberalization, including FTAs, generally claim that it brings increased export
opportunities, greater business flexibility, and a more efficient economy. They also
point out that foreign countries usually have higher trade and investment barriers than
those in the United States. Trade agreements, therefore, usually require greater
lowering of barriers by the foreign country than by the United States. They also
argue that the United States may be in danger of being left behind as other nations
conclude FTAs that do not include the United States.

⁴² The reports are available from the U.S. Trade Representative at
[http://www.ustr.gov/new/fta/Singapore/advisor_reports.htm] See also Trade Reports
International Group. Endorsing the FTAs. Washington Trade Daily, Vol. 12, No. 44,
March 3, 2003. The 31 trade advisory committees include more than 700 individuals
representing business, labor, environmental groups, consumer groups, state governments and
academia.

Several large corporations and business organizations have provided support for
FTAs. The U.S. Chamber of Commerce provided input to the USTR on the issues
that it thought should be covered in a final agreement. The US-Singapore FTA
Business Coalition, which includes membership by the Chamber of Commerce, the
Business Roundtable, the National Association of Manufacturers, the Coalition of
Service Industries, and about 100 U.S. companies and other organizations signaled
their strong support for the FTA.⁴³
The National Conference of State Legislatures representing U.S. state and local
governments indicated its support for the U.S.-Singapore FTA provided that the FTA
not infringe upon the U.S. federal system nor afford foreign investors greater rights
than those afforded U.S. investors and property owners as pertains to state laws, local
ordinances, and regulations.⁴⁴ This issue relates to the “no greater rights” language
incorporated into the act providing Trade Promotion Authority to the President.⁴⁵
As for the effect of trade with Singapore on the U.S. economy, a group of
analysts have quantified the welfare impact of the FTA on the United States as a
positive 0.19% of GNP, or about $18 billion.⁴⁶ For the past three years, the United
States has run trade surpluses with Singapore. The net macroeconomic effect on U.S.
employment of this trade, therefore, is generally positive, although bilateral trade
balances have little effect on overall U.S. employment levels. On a microeconomic
level, however, the electronic equipment and other machinery and equipment
industries could experience greater import competition under the FTA.
The domestic apparel industry would appear to lose the most tariff and quota
protection from imports under the FTA, but U.S. import quotas on textiles and
apparel are already scheduled to be eliminated on January 1, 2005 under the WTO
Agreement on Textiles and Clothing. The FTA agreement also contains strict rules
of origin that tend to neutralize effect on imports of the tariff reductions. In 2002, the
United States imported from Singapore $233.79 million in knitted or crocheted
articles of apparel and clothing (HS 61) on which the duties totaled $43.4 million or
an average duty rate of 18.6%. The United States also imported $42.3 million from
Singapore in other articles of apparel and clothing (not knitted or crocheted, HS 62)

⁴³ US-Singapore FTA Business Coalition. U.S.-Singapore FTA Business Coalition
Enthusiastically Endorses Trade Deal: Pledges to Work Hard for Congressional Approval.
Press Release. January 16, 2003. [http://www.us-asean.org/ussfta/index.asp]
⁴⁴ National Conference of State Legislatures. Letter to Ambassador Robert Zoelick, Re:
Comments on the Proposed Singapore Free Trade Agreement. Federal Register, August 14,

2002, Vol. 67, No. 157.

⁴⁵ P.L. 107-210, 19 U.S.C. 3802 §2102(A)(3).
⁴⁶ Drusilla Brown, Alan V. Deardorff, and Robert M. Stern, “Multilateral, Regional, and
Bilateral Trade-Policy Options for the United States and Japan,” Research Seminar in
International Economics, Discussion Paper No. 490, available at
[http://www.spp.umich.edu/rsie/workingpapers/wp.html], Dec. 16, 2002. Cited in U.S.-
Singapore Free Trade Agreement: Potential Economywide and Selected Sectoral Effects,
by the United States International Trade Commission, June 2003.

on which duties totaled $8.5 million for an average of duty rate 16.3%.⁴⁷ These rates
are relatively high.
Other significant terms of the agreement appear to be in greater access to
Singapore’s services market by U.S. companies. The agreement not only includes
a lowering of regulatory barriers for U.S. subsidiaries operating in Singapore and
legal protections comparable to those in the United States, but it ensures that U.S.-
based companies will be able to sell their services (such as portfolio management,
consulting services, video, music, and software delivered electronically) without
border barriers or customs fees. The Singaporean market, however, is relatively
small and highly competitive.
Some have criticized bilateral FTAs because they can introduce economic
inefficiencies by distorting trade flows. They tend to divert export and import trade
toward the countries involved.⁴⁸ For example, under the North American Free Trade
Agreement, some U.S. importers have turned to suppliers in Mexico rather than
buying from Asia, and some manufacturers from Asia have relocated to Mexico to
take advantage of the tariff-free access to the North American market. Inefficiencies
caused by such trade diversion, however, may be offset by gains in efficiency through
trade creation — additional trade generated by the existence of the larger, unified
market.
Several factors mitigate against significant trade creation or trade diversion
being caused by the U.S.-Singapore FTA. Both Singapore and the United States
already have low trade barriers; the two markets are separated by long distances; and
the Singaporean economy is relatively small (population of 4.4 million in an area
roughly 3.5 times the size of the District of Columbia). Still the country boasts a
substantial economy with a GDP of about $88 billion or about the same size as that
of Oregon or South Carolina and two-way trade with the United States of roughly
$30 billion. This trade, however, amounts to only 1.6% of total U.S. trade of $1,982
billion. The US-Singapore FTA, therefore, does not seem likely to create a
significant amount of new U.S. exports or imports of goods.
Some trade diversion is possible under the FTA. Manufacturers currently
producing elsewhere in Asia could relocate to Singapore. However, with Singapore’s
per capita income at $20,600, average hourly labor cost of $7.73 (compared with
$5.55 in Taipei, Taiwan, $1.12 in Bangkok, Thailand, and $0.64 in Guangzhou,
China), and office occupancy costs 67% higher than those in Guangzhou and 330%
higher than those in Bangkok,⁴⁹ it seems unlikely that a great number of factories
would move to Singapore to take advantage of the FTA. Attempted illegal trans-
shipments from regional producers, however, could increase. The FTA addresses
this potential problem with strengthened customs procedures.

⁴⁷ Calculated from data from the U.S. International Trade Commission’s Dataweb database.
⁴⁸ For an analysis of FTAs, see CRS Report RL31356, Free Trade Agreements: Impact on
U.S. Trade and Implications for U.S. Trade Policy, by William H. Cooper.
⁴⁹ Urban Land Institute (Singapore). Economist Intelligence Unit.

Bilateral FTAs, moreover, also play a role in the trade liberalizing process.
Currently, markets are opened primarily through multilateral negotiations under the
World Trade Organization, through organizations such as APEC, or by sectoral
initiatives. Given the slowness of the WTO multilateral negotiating process and the
lack of further progress on sectoral trade liberalization following the Information
Technology Agreement⁵⁰ in 1996, countries can do an “end run” around the WTO
and liberalize trade with other like-minded countries. The trade diversion created by
such FTAs, however, unleashes pressures for governments to either create FTAs of
their own or join into existing FTA arrangements. Traditionally protectionist
countries, such as China or Japan, now are actively seeking FTA-type arrangements
with other nations. Bilateral FTAs, therefore, can become building blocks, rather
than stumbling blocks, to global trade liberalization.
FTA provisions on the temporary entry of business personnel and
professional workers are raising concerns among many in the field of immigration
because immigration law traditionally is spelled out by Congress, not the executive
branch. Some maintain that the USTR has negotiated these immigration provisions
without any authority or direction to do so from Congress. The Labor Advisory
Committee, in particular, was critical of the provisions on the temporary entry of
business personnel and professional workers because it appears to enable workers
from Singapore who have no direct employment except a service contract to enter the
United States, and such visa programs, they argue, would be in addition to the
existing H-1B system without the existing Labor Condition Application (LCA)⁵¹
protections for domestic workers. The mock markup sessions in the House and
Senate Judiciary committees addressed this issue. (See discussion in the above
section of this report on Temporary Business Personnel and Workers for details.)
More generally, some point out that these provisions bound by the FTA may
constrain current and future Congresses when they consider revising immigration law
on business personnel, treaty traders, intra-company transfers, and professional
workers because the United States would run the risk of violating the FTA.
In responding to the Labor Advisory Committee report, the USTR maintained
that the temporary entry of professionals falls within Trade Promotion Authority Act
objectives regarding the opening of foreign country markets for U.S. services and
investment, in particular to reduce or eliminate barriers that restrict the operations of
service suppliers or the establishment or operations of investments. The USTR
claimed that ensuring cross-border mobility of professionals and other business
persons is critical for U.S. companies in developing new markets and business
opportunities abroad. The USTR also argued that it is incorrect to assert that the
labor attestations required under the FTA would be less rigorous than the LCA called
for under current U.S. law. According to the USTR, the labor attestation required
under the FTA also is to be modeled after the LCA that the Department of Labor

⁵⁰ The Information Technology Agreement, concluded by 29 WTO participants in 1996,
eliminated duties on most IT products with extended phase-in periods for some participants.
⁵¹ The U.S.-Singapore Free Trade Agreement. Report of the Labor Advisory Committee for
Trade Negotiations and Trade Policy (LAC), February 28, 2003.

requires under the existing H-1B visa program, and (as is the case under the H-1B
program) fees may be collected along with the labor attestations.⁵²
As discussed earlier in this report, the Integrated Sourcing Initiative also has
generated some debate. At issue is the extent to which certain information
technology goods and medical equipment that trade duty free can be counted as
Singaporean. Since the items already trade duty free, the ISI would allow them to
avoid U.S. customs user fees of about 0.23% of the value of the import. The
initiative was aimed at two Indonesian islands where many producers located in
Singapore procure components. Indonesian manufacturers would not be covered by
the labor, environmental, and other provisions of the FTA. Indonesia also would not
be required to provide any reciprocal access to its markets. A concern was that other
countries, such as China, might also be able to use the provision to ship product
through Singapore to the United States in order to avoid U.S. Customs Users fees.
Some language dropped from the final text of the FTA appears to resolve this issue.
In order for a third country to take advantage of the ISI, it would have to ship a
qualifying product from the United States to Singapore to be incorporated into a
product subject to the regional content requirement and then shipped back to the
United States.
Also at issue is the extent to which particular provisions of the U.S.-Singapore
FTA would be used as a template for FTA negotiations with other nations. Of
particular concern are current negotiations with five countries of Central America,
the Southern African Customs Union, Morocco, and with Australia, as well as the
proposed Free Trade Area of the Americas that would cover the Western hemisphere.
In many of these countries, labor and environmental standards are considered to be
lower than those in Singapore.
The U.S.-Singapore FTA states that both parties are to ensure that their domestic
environmental laws provide for high levels of environmental protection and are to
strive to continue to improve such laws. The agreement also requires that the parties
effectively enforce their own domestic environmental laws. With respect to labor
standards, both parties also are to reaffirm their obligations as members of the
International Labor Organization. They are to strive to ensure that their domestic
laws provide for labor standards consistent with internationally recognized labor
principles. The agreement further requires the parties to effectively enforce their own
domestic labor and environmental laws. These obligations are to be enforceable
through the agreement’s dispute settlement procedures but with financial penalties
(capped in amount) for non-compliance. Labor interests point out that while the
Singapore agreement commits the signatories to enforce their domestic labor laws,
it does not actually commit the signatories to have labor laws in place, or to ensure
that their labor laws meet any international standard or floor.⁵³

⁵² Letter. U.S. Trade Representative to Mr. George Becker, Chair, Labor Advisory
Committee on Trade Negotiations and Trade Policy. c. March 2003.
⁵³ Lee, Thea M. Testimony Before the Subcommittee on Trade of the U.S. House Committee
on Ways and Means, June 10, 2003.

In terms of U.S. security interests, the FTA would add a formal economic link
to the security relationship with Singapore. In 1990 and 1992, Singapore signed
access agreements that provide for limited U.S. use of air and naval facilities in
Singapore. This was partly a result of the U.S. withdrawal of forces from the
Philippines. The 1990 Access Memorandum of Understanding (MOU) with the
United States allows U.S. forces to operate resupply vessels from Singapore and to
use the naval base and ship repair facilities at Sembawang port and the Paya Lebar
military airfield. A 1998 amendment to the MOU allows U.S. access to Singapore’s
new deep-draft pier at Changi Naval Base. In 2001, the USS Kitty Hawk became the
first foreign vessel to dock there.⁵⁴ While the FTA would not materially affect such
defense cooperation, it could provide an economic rationale to maintain close
relations with Singapore on all fronts.
As for the anti-terror campaign, as Al Qaeda has been driven from Afghanistan,
some radical Islamist activity has shifted to Southeast Asia. This was manifest in the
October 12, 2002, bombings in a nightclub district in Bali frequented by western
tourists as well as other attacks on civilian and military targets in Indonesia and the
Philippines. Some analysts fear that Southeast Asia with its widespread Muslim
populations could become a haven for terrorists, a hotbed for training radical
Islamists, a source of finance for terror operations, and a prime location for so-called
“soft terrorist targets,” such as hotels, businesses, and transportation facilities. In
December 2001, the media reported that the Singaporean government arrested
members of a terrorist Jemaah Islamiah cell with extensive links to Al Qaeda that
allegedly was planning to blow up Western embassies, U.S. naval vessels, and a bus⁵⁵
that transports American military service members. Although the FTA would not
materially affect the anti-terror campaign, it would add a link between Singapore and
the United States that could enhance cooperation on certain issues (such as terrorist
financing and customs inspections) and in determining courses of action on issues of
interest to the United States in fora such as ASEAN, the ASEAN Regional Forum,
and the Non-Aligned Movement.⁵⁶
As a major shipping hub, Singapore also has taken measures to curb its potential
for becoming a transshipment point for illegal cargo bound for terrorist buyers, a
loading point for hidden bombs in cargo containers, or a target point for direct attacks
on ships. As a member of the International Maritime Organization, Singapore
already is implementing some of the anti-terrorism provisions of the International
Ship and Port Facility Security Code (ISPS) and the Amendments to the International

⁵⁴ “Terrorists Will Not Deter U.S. from Singapore Naval Stops,” Kyodo News, February 27,

2002.

⁵⁵ Graham, Bradley. Afghan Tape Helped Lead To Singapore Terror Cell, The Washington
Post, January 12, 2002, p. A01. Simon Cameron-Moore and Muralikumar Anantharaman,
“Malaysia, Singapore Seize Qaeda Suspects,” Reuters, January 5, 2002; “Bomb Plot Aimed
at U.S. Embassies in Asia-paper,” Reuters, February 11, 2002
⁵⁶ Singapore PM Urges Peaceful Resolution of Iraq, North Korea, Palestinian Issues.
Bernama News Agency, Kuala Lumpur, Malaysia. February 24, 2003.

Convention for the Safety of Life at Sea (SOLAS),⁵⁷ both due to come into effect in
July 2004. For example, gamma-ray scanners reportedly are soon to be used to
screen containers passing through Singapore ports.⁵⁸
In summary, since Singapore is a relatively small economy, the overall
economic effects of the U.S.-Singapore Free Trade Agreement are not expected to
be great. The U.S. electronics equipment and other machinery and equipment sectors
potentially may face increased imports from Singapore, although U.S. agricultural
exporters may gain from more exports. The agreement would allow greater access
to Singapore’s service sector, and some see it as a standard for additional FTAs with
other nations. The debate over implementation of the FTA fell between business and
free-trade interests who favor more liberalized trade, particularly in services, and
labor or anti-globalization interests who oppose 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.
Legislative Activity
House Committee on Financial Services, Subcommittee on Domestic and
International Trade Policy, Trade, and Technology held a hearing entitled
“Opening Trade in Financial Services — The Chile and Singapore Examples.”
April 1, 2003.
House Committee on Energy and Commerce, Subcommittee on Commerce, Trade,
and Consumer Protection held a hearing entitled “Trade in Services and E-
Commerce: The Significance of the Singapore and Chile Free Trade Agreements.”
May 8, 2003.
House Committee on Ways and Means, Subcommittee on Trade held a hearing
entitled “Hearing on Implementation of U.S. Bilateral Free Trade Agreements
with Chile and Singapore,” June 10, 2003.
House Committee on International Relations, Subcommittee on Asia and The Pacific
held a hearing entitled “U.S. Trade and Commercial Policy in Southeast Asia
and Oceania,” June 25, 2003.
S.Con.Res. 42 (Bond)/H.Con.Res. 167 (Weldon). A concurrent resolution
welcoming the Prime Minister of Singapore, expressing gratitude to Singapore
for its strong cooperation with the United States in the campaign against
terrorism, and reaffirming the commitment of Congress to the continued
expansion of friendship and cooperation between the United States and
Singapore. S.Con.Res. 42 passed the Senate on May 6, 2003. Referred to the
House.

⁵⁷ For details, see [http://www.imo.org/home.asp].
⁵⁸ Abbugao, Martin. Governments Urged to Step Up Maritime Safety Against Terrorism.
Agence France-Presse, January 21, 2003.

H.R. 2739, the United States-Singapore Free Trade Agreement Implementation Act,
was introduced July 15, 2003, by Representative DeLay.
S. 1417, the United States-Singapore Free Trade Agreement Implementation Act,
was introduced July 15, 2003, by Senator Grassley.
House Ways and Means and Senate Finance Committees and House Judiciary
Committee held mock markups of the draft implementing legislation for the
U.S.-Singapore FTA. July 10, 2003. The Senate Judiciary Committee held a
mock markup of the legislation. July 14, 2003.
House Judiciary Committee reported out H.R. 2739 by voice vote. July 15, 2003.
House Ways and Means Committee and Senate Finance Committee approved H.R.
2739, U.S.-Singapore Free Trade Agreement Implementation Act by a vote of

32-5. July 17, 2003.

Senate Finance Committee unanimously approved and ordered reported S. 1417, the
U.S.-Singapore Free Trade Agreement Implementation Act. Senate Judiciary
Committee also approved the act. July 17, 2003.
The House passed H.R. 2739 (United States-Singapore Free Trade Agreement
Implementation Act) by a vote of 272-155 (Roll No. 432). Received in the
Senate. Read twice. Placed on Senate Legislative Calendar under General
Orders. Calendar No. 226. July 24, 2003.
The Senate approved H.R. 2739 (United States-Singapore Free Trade Agreement
Implementation Act) by a vote of 66 to 32 (Record Vote Number: 318).

Appendix A. U.S. Imports from Singapore, Customs Value by
Two-digit Harmonized System Commodity Codes
2000-2002
(Million U.S. Dollars)
U.S. Imports from Singapore in:
HSCommodity Description
200020012002
Total for Singapore19,178.315,000.014,802.2
84 Machinery 10,384.6 8,221.6 8,004.7
85Electrical Machinery4,761.72,977.02,410.2
29Organic Chemicals633.6868.61,577.2
98Special Other1,156.21,013.8917.5
90Optical, Medical Instruments714.7722.0756.0
61Knit Apparel265.8233.6233.9
27Mineral Fuel, Oil, etc368.0202.9171.9
49Books, Newspapers; Manuscripts121.7125.3123.5
99Other Special Import Provisions116.093.987.8
39 Plastic 50.2 41.6 75.1
88Aircraft, Spacecraft58.772.761.8
62Woven Apparel90.164.852.4
03Fish and Seafood61.254.051.1
87Vehicles, Not Railway52.233.333.6
38Misc. Chemical Products16.825.731.4
71Precious Stones, Metals38.323.927.4
40 Rubber 27.9 23.4 24.4
89Ships and Boats56.525.618.6
18 Cocoa 19.2 10.5 16.7
73Iron/steel Products19.313.411.1
19Baking Related8.09.310.0
21Miscellaneous Food4.96.48.9
82Tools, Cutlery, of Base Metals19.519.38.7
30Pharmaceutical Products5.94.98.1
33Perfumery, Cosmetics, etc7.14.57.5
95Toys and Sports Equipment3.77.26.1

97Art and Antiques5.32.15.3

U.S. Imports from Singapore in:
HSCommodity Description
200020012002
94Furniture and Bedding11.28.65.2
32Tanning, Dye, Paint, Putty6.79.34.4
48Paper, Paperboard10.611.24.2
44Wood5.94.54.0
91Clocks and Watches8.26.03.9
15Fats and Oils3.93.73.8
83Misc Articles of Base Metal4.94.03.3
76 Aluminum 5.1 3.3 2.8
09Spices, Coffee and Tea4.42.62.8
41Hides and Skins2.94.62.4
16Prepared Meat, Fish, etc1.41.82.3
74Copper + Articles Thereof13.83.02.0
96Miscellaneous Manufactures3.52.22.0
20Preserved Food2.32.31.8
37 Photographic/cinema togr aphy 1.5 4.8 1.7
70Glass and Glassware1.40.71.5
63Misc Textile Articles3.32.01.4
42Leather Articles; Saddlery; Bags2.71.71.4
23Food Waste; Animal Feed0.00.21.0
22 Beve rage s 2.6 1.2 1.0
12Misc Grain, Seed, Fruit2.80.70.9
24 T obacco 0.0 0.5 0.8
34Soap, Wax, Etc; Dental Prep0.10.30.6
81Other Base Metals, etc.0.70.50.6
72Iron and Steel3.57.10.5
06Live Trees and Plants0.70.60.4
58Special Woven Fabric, etc0.00.40.4
14Other Vegetable0.60.50.4
69Ceramic Products0.30.30.4
54Manmade Filament, Fabric0.30.20.4

75Nickel and Articles Thereof0.14.40.4

U.S. Imports from Singapore in:
HSCommodity Description
200020012002
35Albumins; Mod Starch; Glue0.10.10.3
68Stone, Plaster, Cement, etc0.90.20.3
80Tin and Articles Thereof0.20.80.2
17 Suga rs 0.2 0.2 0.2
28Inorganic Chem; Rare Earth Metals0.60.30.2
57Textile Floor Coverings0.20.30.2
25Salt; Sulfur; Earth, Stone0.10.00.2
08Edible Fruit and Nuts0.90.40.2
93Arms and Ammunition0.10.20.1
86Railway; Traffic Sign Equipment0.10.10.1
64 Footwear 1.6 0.2 0.1
65 Headgear 0.2 0.1 0.1
92Musical Instruments0.50.40.1
59Impregnated Text Fabrics0.10.10.1
13Lac; Vegetable Sap, Extract0.50.20.1
10 Cereals 0.0 0.0 0.1
11Milling; Malt; Starch0.10.10.1
52Cotton and Yarn, Fabric0.10.10.1
07 V e ge tables 0.0 0.0 0.0
01Live Animals0.00.00.0
46Straw, Esparto0.10.10.0
50Silk; Silk Yarn, Fabric0.00.00.0
53Other Vegetable Textile Fiber0.00.00.0
67Artificial Flowers, Feathers0.00.10.0
56Wadding, Felt, Twine, Rope0.10.00.0
05Other of Animal Origin0.10.10.0
79Zinc and Articles Thereof0.00.00.0
78Lead0.01.10.0
66Umbrella, Walking-sticks, etc0.10.20.0
60Knit, Crocheted Fabrics0.70.00.0

43Furskin and Artificial Fur0.00.00.0

U.S. Imports from Singapore in:
HSCommodity Description
200020012002
45Cork0.00.00.0
47Wood Pulp, etc.0.00.00.0
26Ores, Slag, Ash0.00.00.0
31 Fe rtilizers 0.0 0.0 0.0
36 Explosives 0.0 0.0 0.0
02Meat0.00.00.0
04Dairy, Eggs, Honey, etc0.10.00.0
51Animal Hair+yarn, Fabric0.00.00.0
55Manmade Staple Fibers0.10.00.0
^Source:^{U.S. Dept. of}^C^o^m^m^e^{rce, Bu}^reau^of^C^eⁿ^s^u^s

Appendix B. U.S. Exports to Singapore by Two-digit
Harmonized System Commodity Codes, 2000-2002
(Million U.S. Dollars)
U.S. Exports to Singapore in:
HSCommodity Description
200020012002
Total Singapore17,806.317,651.716,217.9
⁸⁴^Machⁱⁿ^ery^5,364.2⁴^,610.8⁴^,158.0
⁸⁵^El^ect^ri^cal^Machⁱⁿ^ery^5,935.4⁴^,406.9³^,820.6
⁸⁸^Aⁱ^rcraf^t^{, S}^p^acecraf^t^841.2³^,548.0²^,824.9
⁹⁰^O^p^tⁱ^cal^{, n}^o^t^8544;^Medi^cal^In^s^t^r.^1,369.5¹^,020.6¹^,125.7
²⁷^Miⁿ^e^ral^F^u^el^{, O}ⁱ^l^,^et^c^320.6^467.0^613.5
³⁹^Pl^as^tⁱ^c^652.6^545.8^601.9
⁹⁸^S^p^eci^al^O^t^h^e^r^554.3^550.7^499.3
²⁹^O^r^g^aⁿⁱ^{c C}^h^emⁱ^cal^s^403.0^405.3^368.2
³⁸^Mi^s^c^{. C}^h^emⁱ^cal^Produ^ct^s^357.6^285.0^316.3
⁷⁶^A^l^u^mⁱⁿ^u^m^69.9^28.6^118.0
³²^T^aⁿⁿⁱⁿ^g^,^D^y^{e, Pai}ⁿ^t^,^Pu^t^t^y^{, In}^k^s^89.1^77.7^107.6
⁷³^Iron^/^s^t^eel^Produ^ct^s^114.3^104.0^107.3
⁸⁷^V^e^hⁱ^cl^es^{, N}^o^t^R^aⁱ^l^w^ay^93.9^124.1^100.8
³⁷^Ph^ot^og^raphⁱ^c^/^Cⁱⁿ^em^at^og^raphⁱ^c^105.2^87.3^97.1
²⁸^In^org^aⁿⁱ^{c C}^h^emⁱ^cal^s^;^R^a^{re Eart}^h^71.9^73.3^92.1
⁴⁹^Book^s^,^N^e^w^s^papers^{, Man}^u^s^cri^p^t^s^86.6^79.3^81.9
⁷⁰^G^l^as^s^an^{d G}^l^as^s^w^are^29.7^38.2^67.4
⁷¹^Preci^ou^s^S^t^on^es^&^Met^a^l^s^{, C}^oⁱⁿ^s^96.4^59.4^66.1
⁴⁸^{Paper, Paper}^board^93.8^70.4^64.8
⁴⁰^R^u^bber^52.1^44.6^61.8
⁸³^Mi^s^c^A^r^tⁱ^c^l^e^s^of^Bas^e^Met^a^l^36.7^57.5^61.7
³³^Perf^u^m^ery^,^C^o^s^m^etⁱ^c^{, Et}^c^60.0^64.7^59.4
⁸²^T^ool^s^,^C^u^t^l^e^ry^{, of}^Bas^e^Met^a^l^s^70.3^51.9^53.9
³⁴^S^o^{ap, Wax}^,^Et^c;^D^eⁿ^t^al^Prep^45.5^39.1^50.2
⁰⁸^Edi^b^l^e^F^r^uⁱ^t^an^{d N}^u^t^s^43.2^40.3^47.0
²¹^Mi^s^cel^l^aⁿ^e^ou^s^F^ood^32.9^41.1^46.9
⁹⁵^T^o^y^s^an^{d S}^port^s^Equⁱ^pm^en^t^59.7^52.3^42.8
³⁰^P^h^arm^aceu^{tical P}^r^odu^cts^31.6^46.9^36.8
⁸⁹^S^hⁱ^p^s^an^{d Boat}^s^56.1^112.1^36.7

U.S. Exports to Singapore in:
HSCommodity Description
200020012002
²⁴^T^obacco^71.3^45.7^32.4
⁹⁴^F^u^rnⁱ^t^u^{re an}^{d Beddi}ⁿ^g^42.1^31.4^25.4
²⁰^Pres^erv^e^{d F}^ood^25.5^22.8^25.4
³⁵^A^l^bu^mⁱⁿ^s^;^{Mod S}^t^arch^;^G^l^u^e^21.1^15.5^23.0
⁹⁶^Mi^s^cel^l^aⁿ^e^ou^s^Man^u^f^act^u^r^es^13.1^19.1^22.2
⁷²^Iron^an^{d S}^t^eel^38.8^38.5^22.1
⁰²^Meat^28.4^24.3^19.7
⁶⁸^S^t^on^{e, Pl}^as^t^e^{r, C}^e^m^eⁿ^t^{, Et}^c^26.6^17.9^18.6
⁷⁴^C^{opper an}^{d A}^r^tⁱ^c^l^e^s^T^h^ereof^42.5^17.7^18.2
⁵⁵^Man^m^{ade S}^t^apl^e^Fⁱ^bers^9.0^14.0^15.5
²⁵^{Salt; Su}^lf^u^r^{; Ear}^t^h^,^Stoⁿ^e²⁰^.⁹¹⁴^.⁴¹⁴^.⁹
¹⁹^Bakⁱⁿ^g^R^e^l^a^t^e^d^13.5^13.6^13.6
⁴²^L^eat^h^e^{r A}^r^tⁱ^c^l^e^s^;^S^a^ddl^ery^;^Bag^s^14.7^11.8^11.1
¹⁰^C^e^real^s^13.5^10.5^11.0
¹⁵^F^a^t^s^an^{d O}ⁱ^l^s^9.5³^.3^10.8
⁸¹^Oth^e^{r Bas}^e^Metals^{, Etc.}^9.0⁹^.7^9.6
⁴⁴^Wood^13.5⁶^.4^9.3
²²^Bev^e^rag^e^s⁹^.1^8.9⁸^.8
⁰⁹^Spices^{, C}^o^f^f^{ee an}^{d T}^e^a²^.3^2.5⁸^.7
⁵⁷^T^e^x^{tile Flo}^o^r^Co^v^e^rⁱⁿ^g^s¹⁵^.⁷¹⁰^.⁸⁸^.7
²³^F^{ood Was}^t^e;^Aⁿⁱ^m^al^F^eed^9.3⁶^.0^8.0
⁶³^{Misc T}^e^x^{tile A}^r^ticles⁸^.0⁶^.⁸⁷^.9
⁰⁷^V^e^g^e^t^a^bl^es^8.3⁸^.2^7.6
¹⁸^C^o^coa⁶^.5^8.1⁷^.6
⁷⁵^Nick^{el an}^{d A}^r^ticles^T^h^ereof⁸^.8^8.0⁷^.3
⁴¹^Hⁱ^des^an^{d S}^kⁱⁿ^s⁴^.2^6.6⁷^.3
⁶¹^Kⁿⁱ^t^A^pparel⁶^.1^5.7⁶^.5
⁰⁴^Dairy^,^Eg^g^s^{, Hon}^e^y^,^Etc³^.4^4.8⁶^.4
⁸⁰^Tⁱⁿ^an^{d A}^r^tⁱ^c^l^e^s^T^h^ereof^18.1⁵^.0^6.3
³⁶^Ex^pl^osⁱ^v^es^9.1⁷^.2^6.1
¹⁷^S^u^g^a^rs^4.8⁵^.3^6.0
⁵⁹^Im^pregⁿ^a^t^e^{d T}^e^x^t^F^a^bri^c^s⁵^.7^6.1⁵^.7
⁹³^A^r^m^s^an^d^A^m^m^uⁿ^itioⁿ⁶^.1¹²^.¹⁵^.5

U.S. Exports to Singapore in:
HSCommodity Description
200020012002
⁶²^Wov^eⁿ^A^pparel⁸^.3^6.7⁵^.5
⁶⁹^C^e^ramⁱ^{c Produ}^ct^s^24.6⁵^.6^5.2
⁹²^Mu^sⁱ^{cal In}^s^t^ru^m^eⁿ^t^s⁶^.1^6.7⁵^.1
¹⁶^P^r^{epared Meat, Fis}^h^{, Etc}⁵^.5^5.0⁵^.0
⁹⁷^A^r^t^an^{d A}ⁿ^tⁱ^q^u^e^s^18.3^16.6⁴^.6
⁹¹^C^l^ock^s^an^{d Wat}^c^h^e^s^10.4⁵^.4^4.5
⁵⁴^Man^m^{ade F}ⁱ^l^a^m^eⁿ^t^{, F}^a^bri^c^10.4³^.8^4.5
⁵⁶^Waddiⁿ^g^,^F^e^l^t^,^T^wⁱⁿ^{e, R}^ope^4.5⁵^.6^4.5
⁶⁴^F^oot^w^ear^6.7⁴^.9^4.1
⁸⁶^R^a^ilw^ay^{; T}^r^af^fⁱ^{c Sig}ⁿ^Equⁱ^pm^en^t²^.3^3.0⁴^.0
⁰³^Fⁱ^s^h^an^{d S}^eaf^ood^5.1⁴^.6^3.2
¹³^L^ac;^V^e^g^e^t^a^bl^{e S}^a^{p, Ex}^t^r^act^4.6²^.0^3.2
¹²^Mis^c^Grain^,^{Seed, Fru}ⁱ^t³^.3^2.4³^.0
²⁶^Ores^{, Slag}^{, A}^s^h⁰^.5^1.2²^.6
⁵⁸^{Special Wov}^eⁿ^{Fabric, Etc}²^.9^1.5¹^.8
³¹^Fer^tilizer^s¹^.3²^.⁰¹^.7
⁵²^C^o^t^t^oⁿ^an^{d Y}^a^rn^{, F}^a^bri^c^2.7²^.9^1.5
¹¹^Millin^g^;^{Malt; Star}^ch¹^.⁷⁰^.8¹^.²
⁰⁵^O^t^h^e^{r of}^Aⁿⁱ^m^al^O^rⁱ^gⁱⁿ^1.0¹^.5^1.1
⁶⁰^Kⁿⁱ^t^,^C^r^och^e^t^e^{d F}^a^bri^c^s¹^.2^1.8⁰^.9
⁶⁵^Headg^ear^0.8¹^.0^0.8
¹⁴^O^t^h^e^{r V}^e^g^e^t^a^bl^e⁰^.0^0.1⁰^.8
⁴⁷^Woodpu^l^p^{, Et}^c.^1.6¹^.0^0.7
⁷⁸^L^ead^1.3¹^.2^0.6
⁴³^Fu^r^Skⁱⁿ^an^d^A^r^tif^{icial Fu}^r¹^.7⁰^.⁹⁰^.4
⁶⁷^A^r^tif^{icial Flo}^w^er^{s, Feath}^e^r^s⁰^.²⁰^.1⁰^.³
⁴⁶^S^t^raw^,^Es^part^o⁰^.2^0.1⁰^.2
⁴⁵^C^o^rk^0.5⁰^.3^0.2
⁰¹^Lⁱ^v^e^Aⁿ^im^als⁰^.5^0.3⁰^.2
⁷⁹^Zⁱⁿ^c^an^{d A}^r^ticles^T^h^ereof⁰^.5^0.4⁰^.2
⁵⁰^Silk^{; Silk}^Yarⁿ^{, Fab}^r^ic⁰^.¹⁰^.0⁰^.¹
⁵¹^Aⁿⁱ^m^al^H^aⁱ^r^an^{d Y}^a^rn^{, F}^a^bri^c^0.2⁰^.2^0.1
⁵³^Oth^e^r^Veg^e^tab^l^{e T}^e^x^{tile Fib}^e^r⁰^.1⁰^.¹⁰^.1

U.S. Exports to Singapore in:
HSCommodity Description
200020012002
⁰⁶^Lⁱ^v^e^T^r^ees^an^{d Pl}^an^t^s^0.1⁰^.1^0.1
⁶⁶^Um^b^r^{ella, W}^a^lkⁱⁿ^g^-^stick^s^{, Etc}⁰^.0⁰^.¹⁰^.0
Source: U.S. Dept. of Commerce, Bureau of Census

Appendix C. Reserved Service Sectors/Activities (Subject to
Restrictions, Licensing, Local Presence Requirements, etc.) for
the United States and Singapore Under the U.S.-Singapore Free
Trade Agreement
United StatesSingapore
Restrictions on providing airRestrictions on providing air services, airport ground
serviceshandling services, cargo handling, piloting services,
administration of airports, freight, express delivery,
letter and postcard delivery services, and print
publishing
Maritime transportation servicesMaritime transportation services and the operation
and the operation of U.S.-flaggedof Singapore-flagged vessels
vessels
Requirements for customsRegistration, residency, and/or certification
broker’s license and patent agentsrequirements for company auditors, architects, land
surveyors, lawyers, security guards, private
investigators, nurses, medical and pharmacy
services and products, Singapore seamen, gambling
services, patent agents, engineers. Local presence
required for registering under the Cooperative
Societies Act, to operate a trade union, operate a
medical school, provide contact lens, apply for trade
permits or documents
Requirements for radio licenses,Requirements for broadcasting licenses. Plant and
sharing of radio spectrum, accessanimal testing services for plants and animals of
to satellite transmissions, satelliteSingapore; ownership of restricted residential
television services, and digitalproperties; development of land sold by the
audio servicesgovernment
Reciprocity in the operation ofIncorporation and reciprocity for telecommun-
cable television systemsications companies; providers of registration
services for the .sg Internet domain name
Restrictions on providing lawRestrictions on providing Social security services,
enforcement, correctionalthe manufacture of beer and stout, cigars, drawn
services, and the following socialsteel products, chewing gum, cigarettes, and
services: income and socialmatches; providing electricity, power supply, water
security or insurance, socialsupply, or public transportation; the transport and
welfare, public education, publicdistribution of natural gas and hazardous
training, health, and child caresubstances/waste, and sewage
Registering securitiesFinancial institutions extending Singapore dollar
credit facilities. Suppliers of credit bureau services
MiningSales of government-held stock or divestitures of
land; privatizing a service; collection and
administration of proprietary government infor-
mation, public schools

United StatesSingapore
Overseas Private InvestmentForeign shareholdings in the PSA Corporation;
Corporation insurance and loanSingapore Technologies Engineering; Singapore
guaranteesAirlines; Singapore Power, Power Grid, Power
Supply, and Power Gas. Operation of government
hospitals, zoning,
Atomic Energy, Alaska NativeDeveloping and managing the island of Sentosa and
Claimsthe Southern Islands
Exports of sensitive products orRegistering a business without appointing a local
technology ma nage r
^Source:^T^e^x^t^of^th^{e U.S.-}^Sⁱⁿ^g^a^{pore Free T}^r^{ade A}^g^reem^en^t.
^No^te:^Fo^r^d^e^{tails see tex}^t^o^f^th^{e A}^g^r^eem^en^t.