U.S.-Singapore Free Trade Agreement

Publication Date: August 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

Type:

Abstract:

On July 31, 2003, the Senate and, on July 24, the House passed H.R.2739 (United States-Singapore Free Trade Agreement Implementation Act) which is to implement the U.S.-Singapore Free Trade Agreement (FTA). The FTA would, with a phase-in period, eliminate tariffs on all goods traded between the United States and Singapore, cover trade in services, and protect intellectual property rights. Earlier in the month, 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 U.S.-Singapore Free Trade Agreement Implementation Act (H.R.2739 (DeLay) and S.1417 (Grassley)) were introduced and by July 17 had received committee approvals.

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.