USTR - 1996 National Trade Estimate-Singapore
Office of the United States Trade Representative

 

1996 National Trade Estimate-Singapore

In 1995, the United States trade deficit with Singapore was $3.2 billion, or $907 million greater than in 1994. U.S. merchandise exports to Singapore were $15.3 billion, up $2.3 billion or 17.6 percent from 1994. Singapore was the United States' ninth largest export market in 1995. U.S. imports from Singapore totaled $18.6 billion in 1995, 20.1 percent more than in 1994.

The stock of U.S. foreign direct investment in Singapore was $11 billion in 1994, 23.7 percent higher than in 1993. U.S. direct investment in Singapore is largely concentrated in manufacturing and petroleum.

IMPORT POLICIES

Tariffs

Singapore imposes tariffs on only four categories of imported goods; 99 percent of imports enter duty-free. In the Uruguay Round of multilateral trade negotiations, Singapore agreed to bind 70 percent of its tariff lines (up from one percent), compared to the United States which has bound 98 percent of its tariff lines. The Uruguay Round agreement went into force on January 1, 1995.

Singapore still maintains significant tariffs on a few products, including cigarettes, alcoholic beverages, automobiles and gasoline, both to discourage their use and to raise revenue. Currently Singapore applies an excise tax of S$30 per liter bottled and S$70 per liter bulk to all distilled spirits. Imported beer and ale have an import duty of S$0.80 per liter; an excise tax of S$2.80 is applied to both imported and domestically produced beer and ale. Singapore has committed to continue to reduce the import duty and increase the excise tax on beer and ale over time in order to gradually equalize tax treatment for domestic and imported product.

EXPORT SUBSIDIES

Singapore offers tax incentives to exporters and reimburses firms for certain costs incurred in trade promotion. The Government also offers significant incentives to attract foreign investment, almost all of which is in export-oriented industries.

LACK OF INTELLECTUAL PROPERTY PROTECTION

Singapore continues to take concrete measures to improve its level of intellectual property protection and strengthen enforcement. Singapore is a member of The World Intellectual Property Organization (WIPO), and is a party to the World Trade Organization agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), though it has not committed to implementing the TRIPs agreement by January 1, 1996, the date required of developed countries. Singapore is not a party to the Berne Convention or the Universal Copyright Convention. In 1987, following close consultation with the U.S. Government, Singapore enacted comprehensive copyright legislation which relaxed the burden of proof for copyright owners pressing

charges, strengthened civil and criminal penalties and made unauthorized possession of copyrighted material an offense in certain cases. In January 1991, Singapore similarly strengthened it trademark act. In 1994 Singapore enacted a new patents act which was amended and strengthened in 1995 to make it consistent with the TRIPs Agreement.

Patents

Singapore's 1994 patent act was not fully consistent with the TRIPs Agreement, particularly with respect to compulsory licensing and government use. In 1995, the Singapore Government enacted amendments which brought the patent law into compliance with TRIPs. On January 1, 1996 the amendments came into effect.

Copyrights

As a result of stepped up enforcement, copyright infringement in the computer and software areas was significantly reduced in 1994. While the Government of Singapore continues to take an active stance in protection of computer software in Singapore, 1995 saw an upsurge of pirated CD ROMs enter the country from China. The Business Software Alliance (BSA), industry and government are working to close off the surge in illicit software. In response to motion picture and phonographic industry requests that the Singapore Government do more to stem the importation, sale and transshipment of pirated videos and CDs, Singapore's Board of Film Censors instituted additional procedures in 1995 to screen for pirated materials, verify copyright authorization, and make it easier for industry to bring injunctions against infringers. In a recently completed civil suit brought by the International Federation of the Phonographic Industry, Singapore's High Court ordered a local distributor of pirated compact discs to pay $673,000 in damages, the largest penalty ever in Singapore for copyright infringement.

While Singapore's copyright law is generally of a high quality, it lacks a provision granting rental rights to copyright holders for sound recordings and software, as is required by the TRIPs Agreement. Developedcountries are required to bring their copyright laws into compliance with the TRIPs Agreement by January 1, 1996.

SERVICES BARRIERS

Telecommunications

In 1992, Singapore restructured the parastatal telecom authority by separating the regulatory authority from the telephone company and the post office. The Government of Singapore granted the corporatized phone company a 15-year monopoly for basic services and a 5-year monopoly on mobile services. In 1993, Singapore also began privatizing the telephone company by floating 11 percent of its shares worth S$4 billion (US$2.5 billion).

Singapore's broad definition of basic telecommunication services, which only the national telephone company is permitted to provide, effectively restricts market access for firms seeking to sell value-added network services (e.g., enhanced fax services). In 1995 Singapore upgraded its participation in the WTO's Negotiating Group on Basic Telecommunications (NGBT) from observer to full member, and tabled an offer in the negotiations. As of March 1996, Singapore's offer retained monopoly or exclusive rights for basic telecommunications facilities, and did not eliminate limits on market access and national treatment until 2007, a period much longer than a number of other major international telecom operators.

Legal services

Foreign law firms may only set up offices in Singapore to advise clients on U.S. or international law. They can not hire or form partnerships with Singaporean lawyers to practice local law in Singapore.

Engineering services

Singapore law requires that two-thirds ownership of an engineering firm be in the hands of Singapore-registered professionals. This has forced some foreign firms to divest majority ownership and has placed limitations on the ability of new companies to enter the market. In 1994 Singapore amended its architects/engineers act to exempt one third of the board members of a company from requirements to be registered engineers or architects.

Financial services

Insurance: Singapore has determined that the local insurance market is saturated, and as a result has not issued any new licenses for foreign or domestic firms seeking access to Singapore's insurance market for several years. Singapore has stated that acquisition of a domestic company by a foreign company would be permitted only if the domestic company needed additional capital. The reinsurance market in Singapore is open to new entrants and captive insurance licenses are available to subsidiaries of multinationals to underwrite their own risk.

Banking and securities: Foreign penetration of the banking system of Singapore is high compared to most countries foreign banks account for almost half of all nonbank deposits from residents and more than half of all nonbank

Loans to residents

The Government of Singapore does impose restrictions on foreign banks, however. In addition to a longstanding freeze on the number of full banking licenses granted to foreign as well as domestic banks, those banks that already have full licenses do not enjoy full market access. Foreign banks cannot open new branch offices, freely relocate existing branches, or freely operate off-premises automated teller machines (ATMs). In addition, foreign banks are restricted to an aggregate 40 percent equity share in domestic banks in the full license category. Offshore banking licenses for the Asian dollar market are available to new entrants; Singapore actively encourages foreign participation in the offshore market in which U.S. and other foreign banks have a substantial presence.

In the securities area, foreign equity ownership of members of the stock exchange of Singapore is limited to a minority stake, although foreign firms can join in the exchange with an international membership with 100 percent foreign equity. However, some restrictions apply to international members with respect to the size of the lots they may trade and when executing certain transactions with residents.

GOVERNMENT PROCUREMENT

At the conclusion of the Uruguay Round, Singapore did not sign the WTO Government Procurement Agreement. In December 1995, Singapore initiated negotiations to join the WTO Government Procurement Agreement (GPA) by tabling an initial offer. As of March 1996, negotiations on Singapore's accession to the GPA were continuing. The United States and Singapore agreed in March to provide each other's products non-discriminatory treatment until July 31, 1996.

 
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