[WASHINGTON] Singapore and the US on Monday (Apr 29) commemorated 20 years since their free trade agreement (FTA) came into force, a milestone that also marks a tripling in bilateral trade over the last two decades.

“This FTA has benefited Singapore and the US tremendously, by growing the trade between our two countries, building confidence between our leaders as well as making a bridge between our people,” Singapore Minister for Trade and Industry Gan Kim Yong said at a reception co-hosted by the US-Asean Business Council to commemorate the occasion in Washington.

Its success demonstrates how two countries can benefit from an “open, inclusive, rules-based multilateral trading order”, he said.

“This has underpinned our economic and commercial relationship for the past 20 years.”

He recounted how the decision to launch negotiations was made between both countries’ former leaders – then president Bill Clinton and then prime minister Goh Chok Tong – after a round of midnight golf in Brunei in November 2000.

While this led to the birth of the FTA, which was finalised after 11 rounds of negotiations over two years, Gan noted that the seeds were planted even earlier, in 1983.

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Then US president Ronald Reagan had spoken about the importance of strengthening economic ties between the US and East Asia during a visit to the region.

This, said Gan, developed into a “clear strategic imperative” for the US-Singapore Free Trade Agreement (USSFTA). For the US, it would signal a long-term commitment to engage South-east Asia, helping to serve as a template for future agreements in the region.

“For Singapore, it would strengthen our domestic economy, reinforce our strong bilateral partnership with the US and help bring the US and the region closer,” he said.

The USSFTA, he added, was “a bridge built at the right place, at the right time”.

It was the first such agreement between the US and an Asia-Pacific country; to date, it remains the US’ only FTA with an Asean country.

Speaking at the reception as well, US Trade Representative Katherine Tai noted that congressional vote count for the USSFTA “passed with flying colours” in the past, an indicator of robust support for the partnership that remains “very durable” to this day.

Since the USSFTA came into force on Jan 1, 2004, Gan said it has been a “pathfinder for our trade and investment relationship over the past 20 years”.

Bilateral trade has since tripled, from US$40 billion in 2003 to US$120 billion in 2022, and the agreement helped to reverse a gradual decline in the years before.

In 2022, the US was Singapore’s second-largest trading partner, while Singapore ranks 17th for the US.

Overall, US investment in Singapore is larger than that in China, Japan and South Korea combined, making the city-state the top recipient of US investment in the Indo-Pacific region.

Meanwhile, even though the city-state is slightly smaller than New York City, it is the third-largest Asian investor in the US.

The US government has estimated that bilateral trade and investment support nearly 250,000 jobs in America.

“We hope that greater trade and investment between the US and Singapore will help generate more good jobs in both countries,” Gan said.

Apart from a substantial boost to trade and investment, the USSFTA has also spawned new areas of cooperation in growing sectors, such as the digital and green economies.

This includes platforms such as the Partnership for Growth and Innovation (PGI), Climate Partnership and the Critical and Emerging Technology Dialogue.

In the next 20 years and beyond, Gan said the next bound of US-Singapore economic cooperation can also serve as a pathfinder, for example, to accelerate the adoption of emerging technologies like artificial intelligence.

He hopes they can create innovation ecosystems that are both trusted and vibrant, and that such collaboration can be a model and bridge for other countries.

Tai said she hopes both countries’ economic relationship in the next 20 years continues to deliver for the people, especially with outcomes that are equitable and sustainable.

Importantly, the US and Singapore share common values and a vision for how they can adapt to new changes and challenges, she said.

“This is because we know, while we talk about our economies in terms of numbers all the time, that our economies are actually more than just numbers,” she said. “Our economies are made up of our people – working people and their communities.”

Bilateral cooperation under the PGI

Earlier in the day, Gan met US Secretary of Commerce Gina Raimondo in the US capital and reaffirmed their commitment to advancing bilateral cooperation under the PGI, Singapore’s Ministry for Trade and Industry (MTI) said.

They discussed a potential collaboration in enhancing semiconductor supply chain resilience, as well as to help micro, small and medium enterprises participate in the digital economy, MTI said.

Through the PGI, launched in October 2021, both countries have been exploring and advancing cooperation in four areas:

• digital economy and smart cities

• energy and environmental technologies

• advanced manufacturing and supply chain resilience

• healthcare

Both leaders also welcomed “good progress” in the Indo-Pacific Economic Framework for Prosperity (IPEF), with the Supply Chain Agreement having entered into force in February, while preparations are under way for the signing of the Clean Economy and Fair Economy agreements.