Six Years On, the US-Singapore Free Trade Agreement Still Helping US Businesses

By Steven Okun, Chairman, the American Chamber of Commerce in Singapore

Thanks to the vigilance of the US government and the US business community, the US-Singapore Free Trade Agreement continues to benefit US businesses in Singapore – one of the most open and competitive economies in the world.

The U.S. has benefited from a robust and comprehensive free trade agreement between itself and Singapore since 2004.  One of the first modern bilateral free trade agreements, the US-Singapore FTA (USSFTA) goes beyond simple tariff reduction to address the duties and obligations of the U.S. and Singapore in numerous trade areas, including goods and services, customs procedures, the movement of business persons, intellectual property protection, and the environment.  The benefits for the United States have been substantial. Since the implementation of the USSFTA on January 1, 2004, two-way trade has increased 20 percent and U.S. exports by nearly 34 percent.

But the USSFTA did not cease opening markets upon its ratification and implementation.  Each year since its inception, the U.S. and Singapore governments meet to review the implementation of the FTA and to solve both outstanding and newly-created trade issues, creating a forum to address issues at a decision-making level.  Thus, not only have the review of the issues that existed at the time of the implementation of the agreement been addressed, the USSFTA also created a platform for emerging issues to be discussed and resolved.

Each year the American Chamber of Commerce in Singapore (AmCham Singapore) creates an FTA Report for the U.S. Government outlining the trade issues that our U.S. member companies face.  Our 2010 FTA Report, just submitted to the US Embassy, covers several issues we have noted in the past along with two new issues: the cross-carriage requirement for media companies and the registration of foreign Private Educational Institutions (PEIs).

Required cross-carriage of media content has become an increasing concern for the media industry in Singapore.  In March 2010, the Singapore Government invoked a new policy which required pay-TV platforms buying American (and other) television programs to allow other pay-TV platforms to “cross-carry” the content if it was sold on an exclusive basis.  This new “cross-carriage” policy was implemented suddenly, based on the premise that StarHub and SingTel should not be permitted to compete on content, which would limit the options available to consumers to watch programming, notably the English Premier League.

This “cross-carriage” mandate is uncharacteristic of Singapore, one of the more, if not the most, open and respected regulatory jurisdictions in the region.  The US business community would like to have addressed whether the “cross-carriage” policy violates the Free Trade Agreement’s IP provision on copyright.   In addition to its impact to the providers of the content, it may also have negative repercussions for consumers, as there will be no incentive to commercialize new developments (e.g. 3D TV) in Singapore.  Singapore has gone to great lengths to attract U.S. media companies to establish regional offices here.  The USSFTA permits a forum where the US government can work directly with the Singapore government on this issue of great importance.

Another issue addressed in AmCham’s 2010 FTA Review is the recently proposed changes to the Proposed Regulatory Regime for the Private Education Sector.  The new regulatory regime could impact negatively U.S.-based or U.S.-registered Private Education Institutions (PEIs) currently operating in Singapore or looking to open branch campuses in Singapore.

The changes have put undo financial and regulatory compliance burdens on existing institutions of all types and formats, forcing them to spend resources on compliance with the new regulations that they could otherwise have spent on programming. It also raises market access concerns for US education institutions that may wish to come to Singapore, which is fast-developing as a key regional hub for higher education in Asia Pacific.

Through the FTA Review, AmCham is advocating that these proposed education changes should be revised to accomplish the Singapore Government’s goal of ensuring high quality educational opportunities for all students, while being more balanced in its design so as to not be perceived as restrictive for foreign PEIs.

As the United States government, business community, workers and consumers debate the merits of pending free trade agreements, such as the US-Korea Free Trade Agreement, along with new multilateral trade frameworks such as the Trans Pacific Partnership, it is vital for all stakeholders to remember that the benefit of these agreement do not stop accruing the date the agreement goes into effect.   Rather, the ongoing feedback mechanisms in the FTA process ensure that new issues affecting the United States are acknowledged and can be reconciled by the governments for the benefit of both treaty parties.

The US business community is fortunate to have the US Singapore FTA annual review mechanism, and a dedicated and vigilant US Embassy backed by a world-class trade team in Washington, to bring such matters to the attention of the Singapore government.  It is this agreement, and the willingness of the two governments to address emerging issues through the FTA process, that helps make Singapore the growing regional hub for Asia Pacific.



Leave a Reply

Your email address will not be published. Required fields are marked *