Accessibility links

Singapore, US Set to Sign Landmark Free Trade Agreement - 2003-05-05

Singapore's Prime Minister, Goh Chok Tong is scheduled to join President Bush at the White House Tuesday to sign a landmark free trade agreement between the two countries.

The pact will remove tariffs of more than $100 million on Singapore's exports to the United States. Singapore mostly exports high-technology goods such as computer chips and electrical appliances to the United States.

For the United States, the main benefit will be greater access to Singapore's financial and other service sectors. U.S. companies will also enjoy better protection for intellectual property rights.

It is the first time the United States has signed such a wide-ranging free trade agreement with an Asian country. The deal has been under negotiation for more than two years.

Nicholas De Boursac, executive director of the American Chamber of Commerce in Singapore, said the agreement is groundbreaking. "The whole question of intellectual property right protection I think is important, and then some of the dispute resolution procedures are very positive," he said.

Singaporean officials are focusing many of their public comments on what they say will be the political benefits of the pact. They say it will enhance the regional perception of the United States, by exposing the large Muslim populations in Indonesia and Malaysia to the benefits of globalization.

Singapore was a strong supporter of the war in Iraq, while its neighbors, Malaysia and Indonesia, opposed it. Singapore's Trade Minister George Yeo says winning Muslim hearts and minds is especially important in the wake of the war.

Singapore's economy is highly trade dependent. The United States is Singapore's largest foreign direct investor and its second-largest trading partner.

Analysts say this agreement could position Singapore as a gateway for U.S. investment into other parts of Southeast Asia and the document itself may be a blueprint for future free trade agreements with other Asian countries.