Table of Contents

Regionalism, Trade and Economic Development in the Asia-Pacific Region

Regionalism, Trade and Economic Development in the Asia-Pacific Region

Edited by M. A.B. Siddique

This book is based on the premise that Regional Trade Agreements (RTAs) in the Asia-Pacific significantly impact on the material progress of the peoples of this region. These impacts – in terms of the benefits and costs associated with RTAs – will vary greatly from country to country. The internationally acclaimed contributors examine the theoretical perspective of RTAs in relation to exchange rates, the role and goals of the WTO and agriculture.

Chapter 10: US–Singapore Free Trade Agreement: Implications for Singapore, Australia and other ASEAN Countries

Jose Tongzon

Subjects: asian studies, asian development, asian economics, development studies, asian development, economics and finance, asian economics, international economics, regional economics, urban and regional studies, regional economics

Extract

Jose Tongzon INTRODUCTION Singapore believes that multilateralism through an open and stable global environment, facilitated by the World Trade Organization (WTO), will allow for the smooth flow of goods and services. However, Singapore also believes that to augment the multilateral trade regime, like-minded countries could work together in bilateral and regional trade agreements to accelerate trade liberalization. Hence, Singapore takes a strategy of ‘additive regionalism’ by signing bilateral free trade agreements with her main trading partners while actively supporting multilateralism (Harrison et al. 2002). By February 2004, Singapore had signed six FTAs, is currently negotiating eight FTAs and has intentions to start negotiating two more. Singapore’s economy with scarce natural resources and a small domestic market depends on imports of raw materials and on the markets of trading partners to absorb exports. Therefore, trade is highly important to sustain Singapore’s economic growth. Table 10.1 shows the extent of its trade to GDP ratio. Trade in goods as of the year 2001 makes up 277 per cent of Singapore’s GDP. Singapore is ranked as the world’s 15th largest exporter and importer of goods, accounting for 2 per cent and 1.7 per cent of the world’s merchandise export and import trade in 2002, respectively. With respect to commercial services, Singapore is ranked as the world’s 16th and 20th largest exporter and importer, respectively. Foreign direct investment (FDI) flows into Singapore stood at US$8.61 billion, illustrating that Singapore is dependent on FDI for her economic growth as well (Wong 2004). Figures 10.1...

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