The US-Singapore Free Trade Agreement (USSFTA) has achieved not just economic but also the strategic objectives of furthering the United States' presence in Asia, Prime Minister Lee Hsien Loong said at a reception in Washington DC as he marked the 10th anniversary of the historic trade agreement.
Below is his full speech:
The USSFTA (US-Singapore Free Trade Agreement) began on a dark and stormy night, literally, because Bill Clinton and my predecessor Mr Goh Chok Tong had agreed to a round of midnight golf in Brunei, after dinner at the 2000 Apec Summit. And the game was almost washed away by a thunderstorm, but the skies cleared and they did have a good game which lasted until three in the morning.
This was after the US elections and George W Bush had already been elected as the next President.
Nevertheless, President Clinton agreed to start the FTA negotiations with Singapore and the next administration came in and continued the negotiations and carried them through to fruition. And under the Bush Administration, we negotiated a high-standard agreement.
For example, Singapore granted Qualifying Full Bank licences to American banks, which enabled Citibank to expand in Singapore in particular, and it's something which we have not since offered to any other FTA partners; although, I may not be telling a secret to say that, several have asked.
And on the American side, America granted us duty-free access for all our exports to America from Singapore. And the USSFTA came into effect in 2004.
Benefits of the USSFTA
The FTA has promoted trade and investments between our two countries. The volume of trade has grown: whether it's consumer products like iPhones, whether it's Raoul shirts from Singapore or Prima Taste spices. But also serious stuff, equipment like oil rigs, or oil drilling rigs, used in rescue operations after the Deepwater Horizon accident in the Gulf of Mexico.
By 2012, total US investments in Singapore had exceeded the volume in any other Asia-Pacific country, including much bigger ones like Japan and Australia, while Singapore companies have supported about 40,000 jobs in the US.
For example, Keppel AmFELS, which manufactures equipment for the offshore and marine industry, is currently one of the largest employers in South Texas with close to 2,500 workers and the CEO is here today.
But the USSFTA goes beyond economics in order to achieve strategic objectives. It has deepened the US' engagement of the region; as you've heard, it was the precursor which led to other US FTAs: with Korea, with Australia, and now negotiating the TPP.
It has enhanced America's longstanding presence in the Asia-Pacific and it has caused other regional countries to sit up and to take note, and to think how they too could deepen their relationship with the US. Because if Singapore decided to do it, presumably we must have concluded there was some sense in the purpose.
Beyond the USSFTA, our broader bilateral relations between Singapore and America have thrived. We have a Strategic Framework Agreement, the SFA, between our two countries which anchors our security relations, and Singapore for our part we're happy to host American warships and airplanes.
And now many more Singaporeans study and work in the US, and many Americans are coming to Singapore to do the same. And long may this continue.
Trans-Pacific Partnership (TPP)
The USSFTA is not the only way Singapore has fostered links between the two sides of the Pacific Ocean. Because soon after concluding the USSFTA, Singapore entered into another FTA, with small partners this time: with Brunei, with New Zealand and with Chile, in order to form the P4 (Pacific 4) group, a small, high-quality FTA which was designed to be a nucleus which would in time grow into something significant in the Asia Pacific. And that has in fact happened, because the P4 has indeed become the starting point of the TPP, the Trans-Pacific Partnership, which is now being negotiated between America and other Asia-Pacific partners. I say now being negotiated but what we secretly hope is that it's now nearing completion of negotiations. And I think there's a good chance of it happening this year.
The TPP will also be a high standard agreement, and will be a game-changer. Because economically it will integrate 40 per cent of the world's GDP, and one third of the world's trade. It's almost as large as the TTIP, which is a friendly arrangement on the other ocean across the Atlantic, between America and Europe, and it will be bigger than NAFTA. It will create 700,000 new jobs in the US by 2025: 10 times the number under the Korea-US FTA.
All parties will benefit substantially under the TPP. There will be strong protection for intellectual property to support innovation, there'll be rules to support e-commerce, which will benefit many technology companies, whether it's Google, eBay, IBM, HP, or many other new ones, and also benefit small businesses. There'll be improved market access, which will mean cheaper products for consumers, and more export opportunities for producers.
Strategically, too, the TPP is vital to the US' international standing and engagement in the Asia Pacific. The US is and will remain a Pacific Power and President Obama has committed himself and his administration, and the US - I hope beyond his administration - to the "rebalance" to Asia. Singapore and many Asia-Pacific countries welcome this, because America's presence in Asia has enabled regional countries to prosper and underpinned peace and stability throughout the region. But the rebalance is not just America's military presence. It must span a broad front - cultural exchanges, tourism links, people-to-people ties, and also economic cooperation.
The strategic landscape in Asia is changing very rapidly. China is the top trading partner for many Asian countries, including many allies of the US. The Asian economies are integrating with one another, not only with China but amongst themselves. For example, Asean is forming the Asean Economic Community, which will be completed by the end of next year, and is negotiating the RCEP, which is an FTA encompassing China, Japan, Korea, Australia, NZ, and also India, plus the Asean countries. So for the US to engage in the region, and to expand its influence and its relevance to Asian countries, trade policy has to be a key instrument. There has to be substance; if I may say, there has to be beef in the hamburger. The TPP is the most important deal on the table or anywhere on the horizon in this respect.
Negotiating the TPP is a complex undertaking. Because it goes well beyond the usual trade staple of reducing tariffs and even non-tariff barriers. The parties have to make some very difficult decisions, and consider how far and how fast they are willing to go in areas with major domestic and political ramifications. Therefore the negotiations have been very demanding and, we in Singapore alone, we have been privileged to have hosted three consecutive ministerial meetings since last December. Perhaps if we have to host another ministerial, we will organise a midnight golf game!
But nevertheless we are almost there, and I'm encouraged by President Obama's promise to constructively resolve the remaining issues and I think we should be able to conclude it this year.
Ratifying the TPP of course is a further step in getting it to become a reality, and it's an exercise in itself. It's important that in the US the TPP has strong bipartisan and public support. Because what is at stake is not just the immediate gains to the US economy, but your long-term engagement in the Asia-Pacific. Your commitment, your demonstration that when you talk about rebalancing, when you talk about developing the ties, you're also bringing substance to the table and you're able to deepen the relationship in ways which go beyond words and speeches, to trade, to investments, to engagements, to interdependence, and to a substantial and constructive presence of the US in the region.
Therefore I hope that the Administration and Congress will work together to obtain trade promotion authority for the administration, and for Congress eventually to ratify the TPP. And I know the business community is very influential, and Mr (Myron) Brilliant was explaining to me that the building here was located here because the president 100 years ago decided it was good to have business presence close to the White House to influence events. And I'm sure the business community will lend your hand and your voices to support the TPP and its ratification.
The US has always promoted an open and inclusive rules-based framework for international cooperation. And that's what has made the US a great world power and one which is welcome and which is accepted as a benevolent and constructive force in many parts of the world. It is also what motivated the US to sign an FTA with a small island nation 10 years ago. I hope it will also persuade the US to conclude and ratify the TPP, to reinforce its engagement in the Asia-Pacific, and to consolidate your position as a Pacific power in the 21st century.