Forum Hears Potential Benefits Of US/Singapore FTA

by Mary Swire, Tax-News.com, Hong Kong

22 July 2003

A recent forum organised to extol the benefits of the US/Singapore free trade agreement due to come into effect next year informed delegates how firms stand to save millions of dollars through elimination of certain taxes and tariffs.

The 350 representatives from both small and mid-sized companies and multinationals learned from Singapore's chief negotiator, Professor Tommy Koh, how the petrochemical industry can expect to save around $54 million per year through reduced tariffs. Similarly, the textile industry will save some $130 million a year.

"I export 5 percent of my components but with this, I can increase exports by two fold if zero tax is implemented," explained Richard Goh, managing director of Mega-Tech Industries. Diana Young, president and CEO of Mil-Com Aerospace concurred: "I do business with the US and currently we bring in products with excise duties. So with this we hope to benefit by the waiver of duties."

Tharman Shanmugaratnam, Senior Minister of State for Trade and Industry, explained that the FTA was Singapore's response to its limitation of size, and establishing a network of free trade agreements is helping to overcome this. "The fact that we are a small player has probably been the biggest impetus. That's why we are moving faster, forging more FTA's than anyone else," observed the Minister.

The measure has yet to receive Congressional approval in the United States, though professor Koh forecasts the FTA will be passed in both the House and Senate in time for next year.

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