SME Spotlight

Singapore firms upbeat on increasing trade with US

The Port of Miami in Florida in the United States. The American Express survey revealed that Singapore enterprises ranked the US as their top trading partner by revenue, followed by Hong Kong and Australia.
The Port of Miami in Florida in the United States. The American Express survey revealed that Singapore enterprises ranked the US as their top trading partner by revenue, followed by Hong Kong and Australia. PHOTO: REUTERS

94% of them believe business opportunities will improve if TPP deal goes ahead: Survey

Seven in 10 medium-sized to large enterprises in Singapore expect to increase trade with the United States over the next five years, an American Express (Amex) survey has found.

The survey covered 531 companies across 35 markets worldwide, including 50 Singapore firms.

An overwhelming 94 per cent of Singapore respondents believe the Trans-Pacific Partnership (TPP) agreement - if this major trade deal goes ahead - will improve business opportunities.

The TPP takes in the US, Singapore, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Vietnam. But it faces significant political opposition, including in the US, where both presidential candidates have indicated they may oppose the TPP's ratification by Congress.

The survey was conducted by the Economist Intelligence Unit (EIU) between March and May this year on behalf of Amex. It covered companies with revenues of between US$250 million and US$1 billion (S$335 million and S$1.3 billion) which trade with the US.

The survey revealed that Singapore enterprises ranked the US as their top trading partner by revenue, followed by Hong Kong and Australia. The Singapore firms remain highly optimistic about trade growth with the US, indicating a continued strong relationship between the two countries.

  • 70%

    Percentage of medium to large-sized enterprises in Singapore which expect to increase trade with the United States over the next five years.

    94%

    Percentage of Singapore respondents who believe the Trans-Pacific Partnership agreement will improve business opportunities.

Mr Nigel Fox, general manager and vice-president of global commercial payments, Amex Singapore, said: "It's very encouraging to see the US continue to be a major trading market for Singaporean mid-sized companies.

"There are clear opportunities to grow revenue through international trade, and access to flexible payment solutions will enable companies to use the opportunities to grow their trading footprint."

The EIU study explored global trading relationships and examined how companies trade, the challenges faced, and how they expect international trade with the US to change based on recent trends and upcoming political and regulatory shifts.

The Singapore respondents, who were chief financial officers, said they were highly satisfied with the quality of trade-related infrastructure in the US, and 88 per cent said US trade infrastructure was either "very good" or "excellent".

However, 40 per cent of the Singapore companies cited exchange rate volatility as a trade barrier. Sixty-two per cent said they rely primarily on bank trade financing, like letters of credit, when trading with the US. They pointed out that the main impediments in accessing finance for trade with the US were limited credit insurance options.

A version of this article appeared in the print edition of The Straits Times on August 17, 2016, with the headline 'S'pore firms upbeat on increasing trade with US'. Print Edition | Subscribe