U.S. Singapore Free Trade Agreement

19 November 2002

Transcript: USTR Zoellick Hails Free Trade Agreement With Singapore

(November 19 news conference in Singapore) (2880)

 

The United States and Singapore have reached agreement on the substance of a Free Trade Agreement (FTA) between the two countries, except for one issue, according to United States Trade Representative Robert Zoellick.

The U.S.-Singapore FTA will be the first free trade agreement the United States has signed with an Asian country, Zoellick said at a November 19 news conference with his Singaporean counterpart, Minister of Trade and Industry B. G. George Yeo.

The one element left to be resolved, Zoellick said, involves the free transfer of capital.

He added that officials from the U.S. Treasury and the Singaporean Ministry of Finance will be working on that sole outstanding issue.

"We have, in my view, state of the art provisions on transparency, and we also have made very significant headway on an area that will be increasing important, which is customs cooperation and issues of transshipment," Zoellick said.

"Assuming that we are able to resolve this last issue and get the drafting done," Zoellick said, he is hopeful "that we would have final action in 2003," with the congressionally approved FTA coming into effect in 2004.

Following is a transcript of the November 19 press conference in Singapore:

(begin transcript)

Press Conference

U.S. Trade Representative Robert B. Zoellick
Singapore Trade and Industry Minister B.G. George Yeo
Tuesday, November 19, 2002

USTR Zoellick: Well, I'm delighted to announce that Singapore and the United States have completed the substance of the Free Trade Agreement we have been negotiating, except for one issue. And in the coming weeks we will be completing the drafting of the legal text and as that is completed, we will then be notifying the U.S. Congress in compliance with our requirements under the Trade Promotion Act.

I am delighted because we have an excellent agreement. It's a comprehensive agreement and as befits two major trading nations and leading economies. I'm also particularly pleased that this will be our first free trade agreement with an Asian country, and that country is Singapore.

We have an extensive coverage of services in this agreement – general provisions, financial services, professional services, a telecommunications chapter, express delivery, audio visual, computer services tourism and others. And so in that sense, given that fact that both our economies are significantly service economies, we think we've oken significant new ground in that area.

We have special provisions dealing with electronic commerce, competition policy, government procurement, and as Minister Yeo and I have spoken, we have an innovative, integrated souring initiative that we believe will also be of benefit to Singapore's neighbors, in particular Indonesia.

We have major advances in the area of intellectual property, and both countries put a strong premium on being economies based on intellectual property protection. We have investment provisions that comply with the new requirements that were given us by the Congress in our Trade Promotion Authority legislation. We have environment and labor provisions, that again comport with that legislation. And we have, in my view, state of the art provisions on transparency, and we also have made very significant headway on an area that will be increasing important, which is customs cooperation and issues of transshipment.

Now the one element left is an element that the U.S. Treasury and the Singaporean Ministry of Finance have still to work on and that deals with the free transfer of capital.

I want to step back for a minute and thank the Prime Minister for initiating this process with the suggestion that he made to President Clinton in November of 2000. I want to thank the negotiating team on both sides, in particular, Ambassador Tommy Koh and Y.K. Ong and my colleague Ralph Ives, Ambassador Frank Lavin, who has been a great help in this process, and his counterpart in Washington, Ambassador Chan Heng Chee. From the U.S. side, we've had a strong inter-agency team and, frankly, we've been in very close contact with Members of Congress and their staff, including one that was visiting here yesterday that I saw. So I'm very pleased and confident that we have a product that will move expeditiously through the Congress when we complete it. I want to thank my long time friend and close colleague George Yeo, who we work with on WTO as well as regional matters, for his patience, his diligence, his intelligence and not least of all, his will power.

We are both leaving straight from here to go to Manila, where we will have a meeting with a number of the ASEAN Economic Ministers to discuss President Bush's Enterprise for the ASEAN Initiative, which will very nicely build off what we have accomplished here over the past months, and indeed days, because it's looking towards the possibility of Free Trade Agreements with other countries in ASEAN.

And indeed, there is a nice book-ends to the trip because, as many of you know, I came here from Sydney where we just launched the process with Australia as well. I want to particularly thank my colleagues. Obviously, it was an extremely long night, particularly for Ralph and his team, they've been up for a long period. We will be pleased to go along and try to answer your questions on details, but I tried to give you some sense of the extensive coverage of this agreement.

Minister Yeo: Thanks Bob. Last month in Mexico, President Bush when he met ASEAN leaders, described Ambassador Zoellick as a tough negotiator, but a good man. I can talk for both aspects of him. I have known Bob for many years, from the time he worked as a deputy to Secretary James Baker. He is a friend of Singapore, and a friend of  Southeast Asia, a good friend. After negotiating all night, both sides have hammered out an FTA we can be proud of - except for the one remaining problem - setting high standards for the liberalization of goods and services.

This agreement is built on the excellent political and economic relationship between the U.S. and Singapore. I thank the negotiating team on both sides; they met in formal sessions eleven times in London, Washington and Singapore, not counting many more inter-sessionals. Both sides were diligent and professional. Most importantly, both sides understood and saw trade liberalization in win-win terms. After almost two years, they have established strong bonds of friendship, which is now an additional bilateral asset that we have.

From Singapore, Bob and I fly immediately to Manila for the meeting between him and the AEM Ministers. And, as he said, an important topic of discussion will be following up on President Bush's Enterprise for ASEAN Initiative, which we, in ASEAN, welcome. Singapore had intended from the beginning that the U.S.-Singapore FTA should be progressively extended to the rest of ASEAN. I will work closely with Bob and the other ASEAN Ministers to ing this about. Thank you.

We'll be happy now to take your questions.

Question [unintelligible]

USTR Zoellick: On legal services, I referenced professional services, and there are a number of areas where we made headway on that. And we made some progress on the legal services issues from the U.S. perspective. As George could say, there are particular sensitivities in terms of the legal profession and its role in providing candidates for the judiciary. But I think we worked through those items. And I'll be pleased to discuss with U.S. law firms how I think we've made steps in the liberalization process.

On chewing gum, we have a modest entry point that is controlled in a certain fashion. But as you'll see in the final text, there has been some additional opening on that issue.

Can you be more specific.

USTR Zoellick: No.  [laughter]

[unintelligible]

USTR Zoellick: I'm happy to discuss legal services. I will put this in the context in terms of the economic interests of the United States. It is overwhelmingly dwarfed by the other list that I mentioned. But having said that, what we tried to work from is the Singapore system of joint legal ventures. We've agreed to some adjustments on how those will operate that will make them easier for U.S. law firms to operate those ventures. And in addition, we worked off and adjusted some elements that Singapore negotiated with Australia related to law schools and degrees.

Q. [unintelligible]

USTR Zoellick: I may ask Ralph to add to this, because I've been focused on the sticking points and a number of these were resolved in the past. But we have provisions that allow an expansion of current operations on the retail side, and particularly some provisions that deal with access, with a phase-in to the ATM network. In addition there are very liberal provisions with other aspects of the financial sector, in terms of securities firms, investment management firms and insurance firms, as well.

I am particularly pleased, it's nighttime now in Washington, and I'm looking forward - while I'm going on to the Philippines – my colleagues, I think, will ief the U.S. financial community, including some particular firms that wanted to expand their operations in Singapore, I think we'll get a very positive reaction.

Q: Notwithstanding the importance of the agreement vis-à-vis Singapore, isn't there a risk that your department . . . endlessly sidetracked . . . Morocco, Australia . . . when in actual fact we should be sweating the big stuff, FTAA, and the Doha round. There's a risk here that your resources are being dissipated endlessly in a series of low level agreements.

USTR Zoellick: Well I'll let the Singaporeans comment on whether they consider it low level. It's a major economic partner of the United States, I think our eleventh largest trading partner. But the best way to answer the core of your question is, in between my stops in Canberra and Singapore, I took part in a meeting with about 25 trade ministers in Sydney, and I'll let George speak to this, but the U.S. is doing everything it can to move the Doha agenda forward.

I would like to believe, and I think most people will fairly evaluate, that the U.S. played a critical role in reversing the failure of Seattle in launching the Doha agenda. At the same time, we supported the WTO trading system by helping to secure inging China and Taiwan into the WTO last year, which in the case of China was a fifteen year effort. And if you think it's easy to ing China and Taiwan into anything at the same time, I would refer you to my experience in doing that and also inging them into APEC ten years ago. It seems to be a special burden to carry.

And in the area of trying to move the Doha Agenda forward, the United States has put forward a very aggressive proposal in agriculture. As I suggested to my ministerial  colleagues in Sydney, I hope that in the coming weeks and certainly before the end of the year to come up a similar very aggressive proposal in non-agricultural market access.

We've also, we obviously would like to move on services. So on the three major market access areas, the United States has taken or will take a very aggressive position.

And we are trying to play a role of a idge as we did in Doha with the European Union and Japan that are trying to seek a oader set of issues. So I think the record testifies to our commitment to Doha. In the case of the FTAA, we had what I considered to be a very successful meeting in Quito, moving that process ahead. I think we are now entering a very significant stage. The United States and azil become co-chairs. So in fact I mentioned to my azilian counterparts when we were in Sydney how we need to follow up together. azil is in a state of political transition obviously, and as you probably know, the President-elect Lula will be coming to Washington early in December.  So I hope and expect this will be part of the discussions with President Bush.

Now to wrap these together, and this is a point that I believe quite strongly. We, to use a term of phrase here, we can walk and chew gum at the same time. And indeed I would argue, that while I appreciate those economists that are fully committed to the multi-lateral system, they haven't, most of them have never had to negotiate anything. And if you've got 145 economies, and one of them decides to hold up the process, I think that it would be a tragedy for the causes of trade liberalization to be help up. And so I firmly believe that a process of trying to have competitive liberalization will enhance our ability to get Doha down. And I could understand concern if the United States hadn't  demonstrated commitment on the global round, but we certainly have in Doha, and we certainly have with our proposals.

So I believe what we're trying to do in the trade field is what I often read from various editorial comment they want the United States to be doing. This is about as multi-lateral as you can get - we're trying to do it globally, regionally and bilaterally in small regions.

I would emphasize this, in case you didn't read the International Herald Tribune this morning, is that there are other benefits we can use with trade agreements. And I think these are important. In some cases, for example, in Central America, in Southern Africa, we can link these to development strategies, and that's a very important part of trade in terms of openness and reform.

I spoke with Secretary Evans just this morning, who was calling me to congratulate us on this agreement. He had just returned from Morocco, and he was telling me how excited the Moroccans are with linking this to their reform effort. So there are many constructive aspects of trade. And indeed it was almost a [unintelligible] of some ten years ago, where people were saying, I hope people recognize the linkage of trade and foreign policy. Well I think it's linked to trade, foreign and security policy, and we are certainly not doing anything to undermine the process of openness, indeed I think we are trying to support it.

Minister Yeo: I don't think any trade minister in the world doubts Bob's commitment to the multi-lateral process - before Doha, at Doha, after Doha, he's been one of those at the forefront, pushing everyone forward. And always coming up with new ideas and new ways to resolve problems and differences. Singapore fully supports the U.S. policy of moving bilateral, regional and multi-lateral trade liberalization simultaneously. It creates a healthy competitive dynamic which leads us all in the end to a better world. In a modest way, Singapore does the same in the region. And our bilateral free trade initiatives have created a certain competitive dynamic in Southeast Asia towards trade liberalization. That's good for ASEAN. And this will enable us to be more effective in competing against China, Latin America and other parts of the world for our fair share of trade and investments.

Q:  [unintelligible]

Minister Yeo: No I can confidently say that almost all sectors in Singapore will benefit from this free trade agreement. It is the most comprehensive that we have to date, and something that we can be proud of, and something we should [unintelligible] . . . Singaporeans, trade, investments and create jobs. Good jobs for Singaporeans. So in this period of global economic suffering, I think this is a piece of good news.

On the last remaining issue, it relates to the free transfer of capital in the financial or economic crisis. Basically, Singapore wants to stick to the present arrangements under the IMF and the WTO. The U.S. would like us to modify our commitment. We are not comfortable, we are still having discussions, and I believe we can should be able to resolve this in good time.

Q:  [unintelligible].

USTR Zoellick: Let me, unfortunately, take you through a little bit of the arcane aspects of U.S. domestic law. It's my hope that we will - in many of the areas we've discussed,  we've been obviously quite specific on language. But we need to complete the legal drafting of this agreement. I hope that will be done in a matter of weeks. So as I've been saying, I hope we can complete the document by the end of the year. Under our trade promotion authority, we then have to give Congress 90 days notice before signing. So assuming that we are able to resolve this last issue and get the drafting done, it would be my hope, that before the end of the year we could notify Congress to trigger that 90-day clock. That would mean that the signing would occur sometime early in 2003. It would be my expectation that then under the trade promotion authority, that President Bush pushed so hard for, this creates special procedures that once we introduce the trade agreement it has to be acted on, on an up or down vote within a certain limited time period. So I'm hopeful that we would have final action in 2003, and that would come into effect in 2004.

(end transcript)

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