WASHINGTON - It tripled trade and demonstrated the benefits of a rules-based trading order. Next, the free trade agreement (FTA) between Singapore and the US can help usher in the age of artificial intelligence (AI), Singapore's Minister for Trade and Industry Gan Kim Yong said in Washington at an event on April 29 celebrating the deal's 20th anniversary.
And as much as the FTA has been a pathfinder for the bilateral trade and investment relationship for the last two decades, Mr Gan said, he hoped its next phase will be as impactful.
"In the next 20 years and beyond, the next bound of economic co-operation between the US and Singapore can also serve as a pathfinder to accelerate adoption of emerging technologies like AI," said the minister, who is on an official visit to the US.
Recounting how the deal came about in a speech at a reception co-hosted by the US-Asean Business Council, Mr Gan said it was "a bridge built at the right place, at the right time".
The decision to launch negotiations on the US-Singapore Free Trade Agreement (USSFTA) was made when then US President Bill Clinton and then Prime Minister Goh Chok Tong met for a round of midnight golf in Brunei in November 2000, he said.
After 11 rounds of intensive negotiations, Mr Goh signed it with Mr Clinton's successor George W. Bush in 2003, and it came into effect in 2004.
Speaking at the same event, US Trade Representative Katherine Tai noted that the deal had sailed through Congress with "flying colours" and bipartisan support, getting the nod from 63 per cent in the House and 67 per cent in the Senate.
"That is actually a really important indicator of the robust support for this particular partnership, and how that support remains very durable to this day," she said.
The reception was attended by members of Congress, officials, and the business community.
Mr Gan noted that the seeds for the deal had been planted as early as 1983, when then US President Ronald Reagan spoke about the importance of strengthening economic ties between the US and East Asia during a visit to the region.
The notion developed into a clear strategic imperative for the FTA and would signal a long-term commitment for the US to engage South-east Asia, he said. "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."
To date, the deal remains the US' only FTA with an Asean country.
Apart from tripling trade from US$40 billion in 2003 to US$120 billion in 2022, the FTA has enabled the US to be Singapore's top trading partner in services for more than 20 years, and its second-largest goods trading partner in 2023.
Singapore is the top recipient of US investment in the Indo-Pacific, and ranks the seventh-highest worldwide.
At over US$300 billion (S$409 billion), US investment in Singapore is larger than in China, Japan and South Korea combined, with almost 6,000 American companies currently in Singapore.
Bilateral trade and investment supports nearly 250,000 jobs in the US.
And although Singapore is much smaller than the US, it is the third-largest Asian investor in the US. More than 200 Singapore companies operate in around 40 of the 50 states, including both large firms and start-ups.
"The success of the USSFTA demonstrates how two countries can benefit from an open, inclusive, rules-based multilateral trading order," said Mr Gan.
The two nations are building on the success to deepen co-operation in new areas with the launch of new platforms like the Partnership for Growth and Innovation (PGI) in 2021.
This is designed to secure inclusive growth through advancing co-operation in areas like the digital economy and smart cities, advanced manufacturing and healthcare.
Another hallmark initiative is the Critical and Emerging Technology Dialogue launched in 2023, through which game-changing technologies - such as AI, quantum and biotechnology - will be tapped by the two partners.
And in little more than a month, Singapore will host a ministerial meeting of the Indo-Pacific Economic Framework (IPEF), a US initiative launched in 2022.
The city state will also host the inaugural IPEF Clean Economy Investor Forum in 2024, bringing together investors, financial institutions and political leaders.
"We appreciate US companies' confidence in Singapore as a preferred business location and gateway to South-east Asia," said Mr Gan.
In his other engagements in Washington, Mr Gan also met US Secretary of Commerce Gina Raimondo and reaffirmed Singapore's commitment to advancing bilateral co-operation under the PGI, the Ministry for Trade and Industry (MTI) said in a statement.
"They discussed 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.
Mr Gan is scheduled to co-chair a joint meeting with Ms Tai to review the deal and discuss new areas of co-operation on April 30.
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He will also participate in a fireside chat hosted by The Economic Club of Washington, DC, where he will discuss international and regional economic developments.
He will visit Canada on May 2 and 3, where he will meet Canadian officials including Minister of Export Promotion, International Trade and Economic Development Mary Ng, and Minister of Small Business Rechie Valdez, as well as the business community there.
This article was first published in The Straits Times. Permission required for reproduction.
