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Viewing cable 08GENEVA559, WTO TRADE POLICY REVIEW OF SINGAPORE, JULY 14 AND 16,

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Reference ID Created Released Classification Origin
08GENEVA559 2008-07-21 14:38 2011-08-25 00:00 UNCLASSIFIED US Mission Geneva
R 211438Z JUL 08
FM USMISSION GENEVA
TO SECSTATE WASHDC 6747
INFO WORLD TRADE ORGANIZATION COLLECTIVE
DEPT OF AGRICULTURE WASHINGTON DC
USDOC WASHDC
UNCLAS GENEVA 000559 
 
 
PASS USTR FOR ROHDE, STILLMAN 
EB/OT 
USDA/FAS FOR ONA 
USDOC FOR ITA 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO USTR
 
SUBJECT:  WTO TRADE POLICY REVIEW OF SINGAPORE, JULY 14 AND 16, 
2008 
 
1.  SUMMARY:  WTO Members conducted the Trade Policy Review of 
Singapore on July 14 and 16, 2008.  Members expressed appreciation 
for Singapore's open trade regime and were generally in agreement 
that Singapore is a model actor in the WTO community.  Members 
encouraged Singapore to bind its remaining unbound tariffs, which 
currently comprise 30 percent of its schedule.  Members also 
questioned Singapore's market access for certain services sectors, 
including retail banking, legal services, ports and construction. 
Members supported Singapore's recent enactment of a national 
competition law and expressed support for Singapore's progress in 
shifting government-linked companies to a purely commercial 
orientation. END SUMMARY. 
 
 
CHAIRMAN'S SUMMARY 
 
2.  The Chairman of the TPR, Ambassador Mario Matus of Chile, 
delivered the following statement: 
 
3. "The fifth Trade Policy Review of Singapore has given us a much 
clearer understanding of Singapore's trade policies and practices 
together with the globalization challenges it faces.  I thank Mr. 
Ravi Menon, Second Permanent Secretary of Ministry of Trade and 
Industry, and his delegation as well as the Discussant, Ambassador 
Shinichi Kitajima of Japan and Members of the TPRB for contributing 
to our informative and constructive exchange of views during these 
two days.  Singapore's response to the large number of questions is 
much appreciated." 
 
4. "Members noted that Singapore continues to be one of the most 
open and competitive economies in the world.  With trade a multiple 
of GDP, Singapore remains committed to promoting a free, rules-based 
multilateral trading system.  Singapore continues to be a steadfast 
supporter of an ambitious outcome in the Doha Round; it was 
commended for its active participation in the NAMA and other 
negotiating groups and for its efforts to move the negotiations 
forward.  Members also commended Singapore's contribution to the WTO 
Aid-for-Trade initiative.  Some Members shared Singapore's view that 
WTO-consistent trade liberalization at regional and bilateral levels 
can form building blocks for the multilateral trading system." 
 
5. "Members congratulated Singapore on its strong overall economic 
performance.  Although its high degree of openness risks leaving 
Singapore vulnerable to periodic external shocks, the economy's 
flexibility had enabled Singapore to adjust relatively rapidly to 
these shocks by improving productivity, for example by investing in 
R&D, and thus contributing to economic growth.  Singapore was 
commended for creating and maintaining a highly competitive business 
environment in which the unemployment rate has decreased to its 
lowest level in a decade and inflows of foreign direct investment 
are substantial.  Some Members encouraged Singapore to address the 
widening of income inequalities." 
 
6. "Members noted that the scope of Singapore's tariff bindings 
remained at around 70% of all lines, and that the bound rates were 
substantially higher than the MFN applied rates; they urged 
Singapore to both increase the coverage of its bindings and to lower 
bound rates, thus narrowing the discrepancy between its bound and 
applied rates.  Members noted that Singapore's highly computerized 
and trade-facilitating customs procedures result in substantial 
benefits to both traders and government agencies.  Singapore was 
also commended for its policy of advocating the adoption of 
international standards to facilitate market access and enterprise 
competitiveness." 
 
7. "Members also noted the enactment of an economy-wide competition 
law and expressed interest in Singapore's assessment of the economic 
impact of the new law as well as of the functioning of the 
Competition Commission.  Members noted the trend towards government 
linked corporations (GLCs) operating on the same basis as private 
companies, significant divestments by Temasek, and the enhancement 
of corporate governance regulation.  Some Members noted Singapore's 
wide-ranging improvements in the protection of intellectual property 
rights as part of its broader effort to encourage innovation and 
create a knowledge-based economy." 
 
8. "Members also welcomed Singapore's liberalization efforts in 
financial services, energy, and telecommunications.  Some Members 
encouraged Singapore to further liberalize services, including legal 
and other professional services, banking, and port services." 
 
9. "To conclude, I would again like to thank Singapore's delegation 
for its efforts in helping us to better understand its trade and 
trade-related policies and the domestic and international contexts 
in which they evolve.  I would once again also like to thank the 
Discussant for his insightful comments, and Members for contributing 
to what has been a very enlightening two days of discussions.  As 
the Discussant stated, Singapore has established a benchmark or a 
text-book case where the rest of Members will have to follow.  We 
look forward to receiving responses to the remaining outstanding 
questions within the next month." 
 
 
US STATEMENT 
 
10. The representative of the United States, Ambassador Peter 
Allgeier, delivered the following statement: 
 
11. "Thank you, Chair.  The United States is pleased to participate 
in Singapore's fifth Trade Policy Review not only because of 
Singapore's longstanding support for the multilateral trading 
system, but also because Singapore is such an important trading 
partner.  The U.S. delegation warmly welcomes Singapore's Mr. Ravi 
Menon, Second Permanent Secretary in the Ministry of Trade and 
Industry, and the rest of the visiting Singaporean delegation, as 
well as Ambassador Karen Tan and the Geneva delegation.  I would 
also thank Ambassador Shinichi Kitajima for his valuable 
contributions as discussant." 
 
12. "The Secretariat's report is as informative and comprehensive as 
always. The government of Singapore's report reminded us of your 
commitment to an open trade policy." 
 
13. "As we did in 2004, the United States applauds Singapore's 
demonstrated commitment to opening markets for trade, development, 
and economic opportunity.  Singapore remains one of the most open 
economies in the world and its consistent efforts to open markets 
through multilateral, regional, and bilateral initiatives have 
enhanced its own competitiveness and that of its trading partners. 
As an open economy, Singapore, according to the government's report, 
"has not been spared the challenges of globalisation, namely strong 
competition from low-cost competitors, the transmission of external 
demand and price shocks into the domestic economy, and increasing 
wage dispersion and income inequality."  But, rather than retreat 
from competition, Singapore has embraced it by maintaining 
macroeconomic stability, seeking higher value activities and 
upgrading workers' skills, capitalizing on opportunities in new 
growth industries, positioning the economy as a services hub, and 
investing in research and development.  The Secretariat further 
highlights Singapore's "notable institutional change" to its 
policy-making structure since its last review.  In 2005, the 
Competition Commission of Singapore was established, thereby 
improving institutional transparency.  As your government report 
states so well, these reforms "have sharpened Singapore's 
competitive edge and positioned it well to face the challenges posed 
by globalisation and seize its opportunities."  The principal 
message for all of us from Singapore's TPR report is that the path 
to success in the face of globalization is to figure out how to make 
globalization work for our economies and citizens rather than to 
pretend one can insulate oneself from these forces." 
 
14. "Singapore's deep integration into the global economy has helped 
it become a prosperous nation, with per capita GDP exceeding 
US$35,000 in 2007.  In that same year, Singapore's merchandise trade 
was four times its GDP and inflows of foreign direct investment 
accounted for the equivalent of one-sixth of GDP.  By focusing on 
private sector-driven R&D and innovation, Singapore's development 
strategy has continued to shift from emphasis on using technology to 
creating technology.  This strategy is enviable. We wish Singapore 
success in overcoming any accompanying wage and income challenges." 
 
15. "Turning to our bilateral trade and investment relationship, we 
are proud to point to the United States-Singapore Free Trade 
Agreement (FTA) as the first comprehensive U.S. FTA with an Asian 
nation.  This FTA has been in force since January 1, 2004." 
 
16. "Singapore - U.S. two-way trade in goods totaled $46 billion in 
2007.  In 2006, the United States was Singapore's second largest 
export market taking roughly 11.5% of Singapore's exports.  In that 
same year, the United States was also Singapore's second largest 
supplier with roughly 13 percent of its total imports coming from 
the United States.  Two-way trade in services was $10.5 billion in 
2006.  U.S. foreign direct investment to Singapore was $60 billion 
in 2006, an increase of almost 11 percent from levels in 2005." 
 
17. "In addition to our cooperative efforts in the WTO, the United 
States and Singapore continue to join forces to promote trade and 
intra-regional integration in Southeast Asia through both APEC and 
ASEAN.  Singapore, as host of APEC 2009, has indicated that it "will 
seek to maintain the momentum on Regional Economic Integration in 
APEC."  We look forward to our work ahead to achieve APEC's 
objectives." 
 
18. "The United States welcomes Singapore's stance that its trade 
policy objective is "to promote a free, open, and stable 
multilateral trading system".  We agree wholeheartedly that 
advancing global trade and investment liberalization and ensuring a 
strong rules-based multilateral trading system is in Singapore's 
vital interest and in the interest of the United States.  We further 
agree with the Singapore government that the WTO's rules-based 
multilateral trading regime has brought greater predictability and 
security to the conduct of trade among nations.    Finally, we share 
the view that the global trading system benefits from all 
WTO-consistent efforts to pursue the maximum possible extent of 
liberalization on the multilateral, regional and bilateral fronts." 
 
19. "At the WTO, Singapore continues to be one of the most effective 
advocates of, and role models for, global trade liberalization.  The 
United States may not agree with Singapore's position on all of the 
Doha Development Agenda issues.  Nonetheless, we applaud Singapore's 
proactive approach to finding mutually beneficial solutions at 
pivotal points in the negotiations.  Earlier in the negotiations, 
Minister Yeo urged Members to keep the Doha negotiations on track 
because they were the best way to reap the benefits of trade 
liberalization.  He also urged Members to show greater respect for 
one another's positions and find creative ways to accommodate 
different interests.  This is a message well worth recalling as we 
approach the upcoming meetings of ministers and senior officials." 
 
20. "Secretary Menon and Ambassador Tan, we wish you and your team a 
successful review, and we look forward to further cooperation with 
Singapore, both here at the WTO and in our bilateral exchanges." 
 
End. 
 
 
ALLGEIER