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| Southeast Asia | |
| Singapore, U.S. to Sign Free Trade Pact | |
| 2003-05-05 | |
| Singapore's prime minister left Sunday for Washington to sign a free trade agreement - the first such pact between the United States and an Asian country. The deal is being touted as a way for Washington to increase its economic presence and visibility in Southeast Asia, which may help it engage millions of Muslims in the region. A staunch U.S. ally, Singapore's support for the war in Iraq has contrasted with the vocal opposition coming from its predominantly Muslim neighbors, Malaysia and Indonesia. "Hey guys! You there in Indonesia and Malaysia! Yes, you. This is how we treat our friends. Iraq is how we treat our enemies. Think 'bout it, 'kay?" ``Winning over Muslim hearts and minds is very important,'' especially in the wake of the Iraq war,'' Singapore Trade Minister George Yeo said in a speech at the National Press Club in Washington last week. ``It is important that they see in globalization and freer trade a message of hope for themselves and their beliefs.'' What a smart fella. Conceived during a golf game between Prime Minister Goh Chok Tong and then-U.S. President Bill Clinton, the U.S.-Singapore Free Trade Agreement will wipe out tariffs and other trade barriers on about $33 billion in annual trade between the two nations. The pact is scheduled to be signed by Goh and President Bush on Tuesday. The United States is Singapore's largest foreign direct investor and its second-largest trading partner. There are about 1,300 U.S. companies in Singapore. Singapore is the United State's 11th largest trading partner, but because Singapore imposes virtually no import tariffs, the U.S. advantage will be in greater access to the financial and other service sectors in one of Asia's main financial centers. It will also offer the United States a blueprint for similar pacts with other Asian nations. For Singapore, a city-state of 4 million people with virtually no natural resources, the agreement will mean tariff savings of about $110 million a year as all U.S. import duties are lifted. We'll get this back ten times over in the next couple of years.
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| Posted by:Steve White |
| #9 Bilateral trade agreements can become paperwork nightmares, just identifying country of origin of goods and controlling the value added components of product. Singapore has no natural resources (other than labor)and so imports many primary products of assembly. Whether it is the chips for the circuit board, or the board in the computer, or the computer in the microwave oven, only the Singapore value added would apply under trade rules. |
| Posted by: john 2003-05-05 19:57:39 |
| #8 Question. Singapore is one of the largest trade hubs in the world. Would all of the trade going through Singapore be counted in this free-trade deal, or just trade initiated in Singapore? |
| Posted by: ruprecht 2003-05-05 17:23:38 |
| #7 For an interesting essay on currency issues, read this article at the Dilacerator blog: http://qsi.cc/mt/mt-tb.cgi?__mode=view&entry_id=335 |
| Posted by: Zhang Fei 2003-05-05 10:33:09 |
| #6 "Dr." Mahathir of Malaysia sees himself as an economist. He sees a future in mercantilism as opposed to free trade. That is his prerogative. The interesting aspect of the region's economic history is that Malaysia and Singapore were at parity at independence from British rule about 40 years ago. (Singapore seceded from Malaysia after contentious ethnic disputes, but shared with Malaysia the excellent administrative and physical infrastructure left behind by British colonial administrators). Today, Singapore's GDP per capita is about triple Malaysia's. The difference in economic policies is stark - Malaysia adopted a mercantilistic import substitution policy, whereas Singapore adopted a free trade policy. The loopy economic ideas espoused by Mahathir and his predecessors have contributed to Malaysian underperformance except with respect to its Muslim counterparts. It would be a good thing if he actually goes through with this - another weak Muslim country is not necessarily a bad thing. The funny thing is, Malaysia's claim to fame in the world financial markets is the inept gambling of its central bank on the currency markets, during which its Bank Negara lost billions of dollars betting the wrong way. |
| Posted by: Zhang Fei 2003-05-05 10:22:00 |
| #5 Fish-hooks have more intrinsic value than gold and make a better currency. |
| Posted by: Shipman 2003-05-05 08:39:24 |
| #4 Meanwhile... Dr Mahatir has laid plans for Malaysia to remonetise gold as a settlement currency between Muslim nations... it is an attempt to create their own trading block and give a big F* You to the US$. They see the weakness inherent in the US paper money. They see the disproportionately huge supply of US dollars coupled with an enormous Current Account Deficit and a massive new bond issue. They see the rising Euro and realise the gold market is a threat to the US dollar, and they realise they can in one fell swoop damage the US economy and create an Islamic trading block based on traditional Islamic monetary principles: the Gold Islamic Dinar. |
| Posted by: Anon1 2003-05-05 08:05:23 |
| #3 I think it's a mistake to be holding back free trade over a spat with Iraq; there are other ways to make the Chileans pay than to limit free trade which has tangible benefits for the United States. |
| Posted by: Brian 2003-05-05 06:40:17 |
| #2 ``Winning over Muslim hearts and minds is very important,'' especially in the wake of the Iraq war,'' Grab 'em by the balls, their hearts and minds will follow. |
| Posted by: mojo 2003-05-05 01:59:10 |
| #1 Singapore up, Chile down. See how it works? But come on, most of us probably still associate the place with this. |
| Posted by: someone 2003-05-05 00:21:28 |