How is Business Responding?
- ADBI series on Asian Economic Integration and Cooperation
Edited by Masahiro Kawai and Ganeshan Wignaraja
Chapter 6: Singapore
Chia Siow Yue INTRODUCTION The number of free trade agreements (FTAs) has been growing rapidly in Asia since 2000 and these agreements are used by governments as a major instrument of trade policy and foreign policy. Singapore has signed and is negotiating numerous plurilateral and bilateral FTAs to secure economic benefits by gaining access to the markets of FTA partners, consolidating itself as a services hub, attracting more foreign investors and protecting its growing investments abroad. Singapore offers free trade in goods (except for import tariffs on a few alcoholic beverages), so its attraction for its FTA partners lies in its restricted services market as well as its value as an investment location, investment partner and regional gateway to the rest of Asia. There is a growing literature on measuring the effects of FTAs through computable general equilibrium (CGE) modelling. However, there are few empirical studies on the behaviour and perceptions of firms toward FTAs in Asia. The main contribution of this chapter is the results of a survey of firms in Singapore that attempts to cover this knowledge gap. The survey covers firms in three export industries: electronics, pharmaceuticals and chemicals, and textiles and garments. Although the automotive industry had initially been chosen as one of the three industries of focus in the survey, its coverage had to be abandoned when the nine firms surveyed were found to be engaged in trading rather than automotive parts manufacturing.1 The automotive industry was replaced with the pharmaceuticals and chemicals industry, which...
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