WT/TPR/S/130 Trade Policy Review
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II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES
(1) OVERVIEW
1. Singapore is a highly trade dependent country, with trade in goods equivalent to almost 300%
of its GDP in 2003 and, for this reason, has been pursuing a three-pronged trade policy: multilateral,
regional and bilateral. It has always been highly supportive of the multilateral trading system and
belongs to few regional trade groupings, notably ASEAN, ASEM, and APEC, the latter based on
"open regionalism". However, since its previous Review in 2000, it has pursued bilateral FTAs more
vigorously. Whereas at the time of the previous Review, Singapore was in the process of negotiating
its first bilateral FTA, it has currently concluded five bilateral FTAs and is negotiating a further nine.1
Singapore believes that FTAs would act as a catalyst for global trade and investment liberalization.
All its FTAs are WTO-plus and as such, can be used as building blocks towards greater multilateral
liberalization.
2. A few organizational changes have been made to Singapore's policy-making structure,
notably the Trade Development Board becoming International Enterprise Singapore and a
restructuring of agencies in relation to services, mainly due to changing industrial and regulatory
structures. Efforts to enhance transparency have also been made; consultations may be held with the
general public regarding changes to laws and regulations, in addition to consultations with key players
through, inter alia, industry groups and labour unions, where appropriate.
3. With a relatively open foreign investment regime in goods, Singapore has also slowly been
reducing restrictions in key services. During the period under review, for example, restrictions on
FDI in local banking and telecommunications services were lifted. Restrictions remain, however, in
broadcasting and media services, legal services, and foreign ownership of certain types of residential
property; there are also restrictions on investment in certain sectors in which government linked
companies have significant operations.
(2) GENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK
4. There have been no major changes in the general constitutional and legal framework since
Singapore's previous Review in 2000. Singapore's unicameral Parliament is headed by the President.
The President is elected for a term of six years.2The President is assisted by a Cabinet consisting of
the Prime Minister and Ministers. The Prime Minister is appointed by the President, as are all other
Cabinet Members upon advice from the Prime Minister. Members of the Cabinet must also be
Members of Parliament.
5. The term of Parliament lasts a maximum of five years. In addition to elected members, up to
three Non-Constituency Members of Parliament (NCMPs) from the opposition political parties can be
appointed and up to nine Nominated Members of Parliament (NMPs) may be appointed by the
President.3The present tenth Parliament has 94 Members, consisting of 84 elected Members, one
1FTAs have been concluded with New Zealand, Japan, the EFTA States, Australia, and the United
States; Singapore is currently in negotiations with Canada, Chile (Pacific Three along with New Zealand),
India, Jordan, Mexico, and Korea. Under the ASEAN umbrella, negotiations are under way with China, India,
and Japan. In addition, negotiations with Sri Lanka may be launched soon.
2Elections must be held within six months of the post of President becoming vacant or not more than
three months before the incumbent's term of office expires.
3The individuals are generally considered to have distinguished themselves, inter alia, in public
service, arts and letters, culture, the sciences and business, industry or the labour movement. Under the Fourth
Schedule of the Constitution, up to nine Nominated Members of Parliament may be appointed by the President.Singapore WT/TPR/S/130
Page 17
NCMP and nine NMPs. Cabinet approval on treaty participation, including any international
agreements such as those under the auspices of the WTO, must generally be obtained before a treaty
is signed or the relevant instrument of ratification or accession is deposited with the depository. All
new legislation must be enacted by Parliament; where legislation giving effect to Singapore's rights
and obligations under international agreements such as the WTO Agreements does not exist,
legislation is specifically enacted and the rights and obligations contained therein are "incorporated"
into domestic law.4Draft legislation is first formulated by the relevant ministries before being
discussed and approved by Cabinet and then tabled in Parliament. Once passed by Parliament, the bill
must receive assent from the President before being notified in the Government Gazette and becoming
law. All bills except money bills may be introduced by any member of Parliament; money bills may
only be introduced by the Government, usually represented by the Minister of Finance.
6. There are two tiers of courts in Singapore. The Supreme Court of Singapore, which consists
of the Court of Appeal and the High Court, is the superior court of record. The Court of Appeal
exercises appellate civil and criminal jurisdiction, whilst the High Court exercises original and
appellate criminal and civil jurisdiction. The second tier, the subordinate courts, comprise the district
courts, magistrates’ courts, the Coroner’s Court, the juvenile courts and the small claims tribunals.
Appeals relating to decisions taken by the subordinate courts are heard by the High Court and the
Court of Appeal. WTO provisions may not be invoked before a national court of law but can be
enforced through enabling legislation or, if applicable, as part of common law.
(3) DEVELOPMENT AND ADMINISTRATION OF TRADE POLICY
(i) Agencies involved in trade policy implementation
7. Overall responsibility for trade policy formulation and implementation in Singapore remains
with the Ministry of Trade and Industry. One major change in the trade policy framework since 2000,
however, was the restructuring of the Singapore Trade Development Board (STDB) into International
Enterprise Singapore (IE Singapore) on 12 April 2002.5While STDB’s mission was to promote and
facilitate trade, the focus of IE Singapore is to help Singapore-based companies grow and
"internationalize" successfully. The functions of the Economic Development Board (EDB), also
based in the Ministry of Trade and Development, remain unchanged. The EDB is responsible for the
planning and implementation of industrial development and services promotion strategies. The
Singapore Productivity and Standards Board, responsible for improving industrial competitiveness
and the formulation and implementation of standards, has now become the Standards, Productivity
and Innovation Board.
8. There have also been changes in the policy-making structure for agriculture and SPS, with the
activities previously performed by the Primary Production Department in the Ministry of National
Development being moved to a new statutory agency called the Agri-Food and Veterinary Authority;
and with respect to key services such as electricity, telecommunications, and transport (Table II.1).
4Non-constituency and nominated members of Parliament, however, may not vote on bills amending
the Constitution, supply or money bills, no-confidence motions in the Government or bills to remove the
President from office (Part VI, Article 39 of the Constitution).
5The Trade Development Board was set up in 1983 to develop Singapore as an international trading
hub and to promote Singapore's exports of goods and services.WT/TPR/S/130 Trade Policy Review
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Table II.1
Ministerial responsibility for trade-related issues
Ministry/statutory agency Competence
Ministry of National Development
Agri-Food and Veterinary Authority Agriculture and fishing, sanitary and phytosanitary standards
Urban Redevelopment Authority Land use and planning, planning and control development projects
Ministry of Trade and Industry Trade policy; anti-dumping, countervailing, and safeguard measures
International Enterprise Singapore Trade promotion
Economic Development Board Investment promotion; development policy; industrial development
Standards, Productivity and Innovation Board
(SPRING Singapore)Standards and conformance
Singapore Tourism Board Tourism
Hotel Licensing Board Hotel licensing
Agency for Science, Technology and Research
(A*STAR)Science and technology; technopreneurship development
Ministry of Finance
Singapore Customs Customs tariff; valuation; rules of origin; trade facilitation; trade
enforcement
Monetary Authority of Singapore Insurance; banking; securities and futures industry
Ministry of Law
Intellectual Property Office of Singapore Intellectual property rights
Ministry of Information, Communications and the Arts
Info-Comm Development Authority of Singapore Telecommunications, electronic commerce, information technology
Ministry of Transport
Land Transport Authority Land transport
Maritime and Port Authority of Singapore Shipping and ports
Civil Aviation Authority of Singapore Air transport
Source: Government of Singapore.
9. Singapore consults regularly with the business community through meetings between the MTI
and the Singapore International Chamber of Commerce and Singapore Confederation of Industries.
In addition, as a result of a process initiated by the Government in 1998, the Singapore Business
Federation (SBF) was formed on 1 April 2002 under the Singapore Business Federation Act, 2001.
The SBF, which is considered to be the new apex body of the business community in Singapore,
mainly represents the largest companies in Singapore. The Act requires compulsory membership of
all companies registered in Singapore with a paid-up capital of S$0.5 million and above; the
subscription fee ranges from S$300 to S$800 depending on the company's paid up capital. Smaller
companies may also join if they wish to do so. The SBF's role is to liaise with the Government on
matters of concern to its members. Consultations are also held with the tripartite National Wages
Council, the National Trades Union Congress, and the Consumers Association of Singapore, if
deemed appropriate.
10. National committees, such as the Economic Review Committee, are formed from time to time
to examine specific issues. The Committees usually include representation from ministries and
statutory boards, but they do consult with private sector players. A new development since theSingapore WT/TPR/S/130
Page 19
previous Review is that new draft legislation or guidelines may be issued for public consultation,
usually through the website of Ministries and statutory boards.6
11. The Auditor General is required, under Article 148(F) of the Constitution, to audit and report
annually on the accounts of Government, Parliament, and the national courts. However, there is no
independent body to evaluate the Government’s economic policies and measures, although they may
be debated in Parliament.
(ii) Main trade laws
12. Singapore's main trade legislation is the Regulation of Imports and Exports Act, which
includes restrictions on imports and exports for safety and health reasons or in accordance with
international agreements. In addition, the Customs Act addresses issues relating to the Customs tariff,
and excise taxes and includes any preferential rates that may result from Singapore's regional or
bilateral free-trade agreements. Singapore's investment incentives are mainly covered by the
Economic Expansion Incentives (Relief from Income Tax) Act and the Income Tax Act. Since the
previous Review there have been no major changes to the main trade legislation (Table AII.1).
(4) TRADE AGREEMENTS AND ARRANGEMENTS
(i) World Trade Organization
13. Singapore is an original Member of the WTO and grants at least most-favoured-nation (MFN)
treatment to all other WTO Members. Singapore is an active participant in the WTO. It also
participated in the extended services negotiations and accepted the Fourth and Fifth Protocols on
11 April 1997 and 26 February 1998, respectively. With regard to the current round of trade
negotiations, despite recently signing a number of bilateral free-trade agreements, Singapore believes
that multilateral trade negotiations are the best way in which to advance its trade interests. It also
believes that trade liberalization efforts undertaken bilaterally and in regional fora such as APEC,
ASEM, and ASEAN can accelerate the momentum towards trade liberalization and strengthen the
multilateral trading system.7
14. Singapore has strongly supported the Doha Development Round and at the most recent
Ministerial Conference in Cancun, in September 2003, urged Members to reconcile their differences
in order to launch a new round of trade negotiations. In its statement to the Ministerial Conference,
Singapore warned that failure to reach an agreement on a common framework for negotiations would
weaken the multilateral trading system further.8In particular, failure to agree on agricultural
liberalization would jeopardize progress towards meeting the 1 January 2005 deadline set by
Members. During the course of the current WTO negotiations, Singapore has submitted several
proposals on key issues. On market access for non-agricultural products, Singapore has raised several
issues that Members should address, including: the gap between bound and applied rates and the
percentage of rates that are bound; tariff peaks and nuisance tariffs; escalation; and transparency,
notably the use of non- ad valorem tariff rates, which Singapore believes reduces the transparency of a
country's tariff profile and creates difficulty in determining the incidence of tariff protection.9
6Increasingly, ministries and statutory boards are uploading on their websites for public consultation
new draft legislation "of significant public interest". Examples include legislation pertaining to corporate and
financial laws.
7Ministry of Trade and Industry, [Online]. Available at: http://www.mti.gov.sg/public/
frm_cmn_printpage.asp?SID=12&CID=&DID=&Page=, [5 January 2004].
8WTO document WT/MIN(03)/ST/1, 10 September 2003.
9WTO document TN/MA/W/8, 10 September 2002.WT/TPR/S/130 Trade Policy Review
Page 20
Notwithstanding the latter stance on non- ad valorem duties, Singapore's very few applied tariffs all
involve specific rates; in its bound tariff, around 1% of all tariff bindings carry specific duties.10In
the Negotiating Group on Rules Singapore has expressed concern about the continued increase in the
use of contingency measures and has submitted several joint proposals on clarifying and improving
the rules on anti-dumping. Singapore has also participated actively in the negotiations on Services. It
submitted its GATS initial offer on 15 July 2003.
15. Like all Members of the WTO, Singapore is required periodically to notify to the WTO laws
and changes to laws. The status of selected notifications as at January 2004 is given in Table AII.2.
16. Since its previous Review, Singapore has not been involved in any disputes at the WTO as
complainant or defendant.
(ii) Regional agreements
(a) ASEAN
17. Singapore is a founding member of the Association of Southeast Asian Nations (ASEAN),
established in 1967.11The Framework Agreement on enhancing economic cooperation, signed in
1992, established the Common Effective Preferential Tariff (CEPT), which aimed to achieve a free-
trade area among ASEAN members, the ASEAN Free-trade area (AFTA). Under CEPT it was agreed
among the original founding members of ASEAN (Brunei Darussalam, Indonesia, Malaysia, the
Philippines, Singapore, and Thailand (ASEAN-6)) that tariffs on goods committed for tariff
reductions would be reduced to 0-5% by 2008. The ASEAN-6 members decided to accelerate this
process initially to ten years (by 2003) and later to nine years (by 2002). The 0-5% tariff goal will be
reached by 2006 by Viet Nam, 2008 by Lao PDR and Myanmar, and 2010 by Cambodia. ASEAN
member countries have also agreed to eliminate tariffs by 2010 for ASEAN-6 and by 2015 (with
flexibility to 2018) for Cambodia, Laos, Myanmar, and Viet Nam.
18. According to the authorities, around 99.6% of all tariff lines committed for tariff reductions in
the ASEAN-6 are currently within the 0-5% range, while over 53% of tariff lines are zero. The
corresponding figures for the newer ASEAN members is 65.4% and 15%, respectively. In meeting its
goals under the CEPT, Singapore removed all remaining tariffs with regard to its ASEAN partners, as
of 1 January 2001; since tariff reductions are based on reciprocity, however, Singapore's tariff
removal so far applies only to the Philippines and Thailand (Chapter III(2)(ii)).
19. ASEAN is also working to remove barriers to intra-ASEAN trade caused by non-tariff
barriers; to harmonize customs nomenclature, valuation, and procedures; harmonize product
standards and regulatory requirements; and improve rules of origin under the CEPT.
20. Under the ASEAN Framework Agreement on Services (AFAS), signed in 1995, which aims
to eliminate restriction to trade in services and enhance intra-ASEAN cooperation in services,
negotiations currently focus on seven priority sectors.12The protocol to implement the initial package
of commitments on five services (air transport, business, maritime transport, telecommunication, and
tourism) entered into force on 31 March 1998; the protocols to implement the second and third
packages, including commitments in all seven priority services, came into force on 31 March 1999
10The bound tariffs that are subject to specific rates all relate to alcohol and tobacco products.
11Its membership currently consists of: Brunei Darussalam; Cambodia; Indonesia; Laos; Myanmar;
Malaysia; the Philippines; Singapore; Thailand; and Viet Nam.
12These are business services, air transport services, construction services, financial services, maritime
transport services, telecommunication services, and tourism services.Singapore WT/TPR/S/130
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and 31 March 2002, respectively. A third round of negotiations is expected to be completed by
31 December 2004.
21. The Framework Agreement on the ASEAN Investment Area (AIA), signed in 1998,
envisaged liberalizing the investment environment in ASEAN to ensure a free flow of investment in
the area by 2020. The agreement covers direct investment in manufacturing, fisheries, forestry,
mining and agriculture, and services incidental to these sectors. Reservations made by members and
scheduled in the temporary exclusion list were due to be eliminated in 2015 for ASEAN investors and
2020 for non-ASEAN investors. The ASEAN-6 countries agreed to accelerate this process by
eliminating reservations in manufacturing for ASEAN investors by 2003 and for all investors by
2010. In addition, Myanmar has eliminated reservations in manufacturing for ASEAN investors in
2003.
22. ASEAN is also currently reviewing ways in which regional economic integration can be
enhanced, including through additional measures to: remove remaining impediments to intra-ASEAN
trade in goods, services and investment; accelerate the integration of 11 priority sectors13; and put in
place an effective dispute settlement mechanism, modelled after the WTO DSM, to ensure
compliance. It is expected that these measures will be implemented progressively from
1 January 2004.
23. ASEAN is attempting to strengthen links with other countries and regional trading partners.
It is currently negotiating with China to establish the ASEAN-China free-trade area, by 2010 for the
original ASEAN members and 2015 for newer members; negotiations will begin in 2004 to establish
an ASEAN-India FTA, and in 2005 to establish an ASEAN-Japan Comprehensive Economic
Partnership covering trade in goods and services by 2012 for ASEAN-6 and 2017 for newer ASEAN
members. In addition, ASEAN continues to cooperate with Australia and New Zealand under the
AFTA-CER Closer Economic Partnership including on e-commerce legal infrastructure, mutual
recognition of skills, quality assurance systems for fruit and vegetables, and quality assurance and
safety of fish and fishery products, processing and packaging. Cooperation with the EU is taking
place on trade facilitation, industrial standards, food products, and investment promotion under the
Trans-EU ASEAN Regional Trade Initiative (TREATI). ASEAN is also working with the United
States towards a US-ASEAN Trade and Investment Framework Agreement (TIFA) under the
Enterprise for ASEAN initiative (EAI) announced by the United States in 2002.
(b) APEC
24. Singapore participates in the Asia Pacific Economic Cooperation (APEC) forum and aims to
implement free trade and investment by 2010 along with other developed country members of
APEC.14Under its individual action plan (IAP) in 2003, Singapore indicated that it had bound 94%
of its tariff lines at 6.5% or below; by 2005, it will bind 100% of its tariff at 6.5% or below.
Singapore has also committed itself to accelerated implementation of its obligations under the WTO
agreements on TRIPS, TRIMs and Customs Valuation. The Shanghai Accord was signed in
October 2001, which seeks to operationalize the Bogor Goals and provide a roadmap for APEC in the
21stcentury. The accord also established a "pathfinder approach", which encourages those members
ready and able to implement APEC initiatives to do so, thereby establishing a framework for other
APEC members to follow when they are ready to do so. Singapore has been a participant in six such
13The sectors are: airlines, automotives, agro-based industries, electronics, fisheries, health care
products, ICT, rubber based products, textiles and apparel, tourism, and wood based industries.
14Other members of APEC are: Australia; Brunei Darussalam; Canada; Chile; China; Chinese
Taipei; Hong Kong, China; Indonesia; Japan; Korea; Malaysia; Mexico; New Zealand; Papua New Guinea;
Peru; the Philippines; the Russian Federation; Thailand; the United States; and Viet Nam.WT/TPR/S/130 Trade Policy Review
Page 22
pathfinder groups. Other initiatives included: the adoption of appropriate trade policies for "the new
economy"; concrete actions and measures to implement the APEC Trade Facilitation Principles by
2006, aiming to reduce transaction costs by some 5% across the region over five years; and adoption
of transparency principles.15
25. In May 2002, Ministers agreed to maintain the schedules and deadlines that had been put
forward for the fifth WTO Ministerial Conference in Cancun. Ministers also agreed on the need to
consolidate and focus on capacity-building efforts for least developed countries and reached explicit
consensus on the need to deal with the Singapore issues individually. The APEC Economic Leaders'
Declaration in October 2002 endorsed the APEC Trade Facilitation Plan and agreed that transparency
standards be implemented by 2005. In addition, the declaration endorsed pathfinder initiatives on:
advance passenger information systems; the revised Kyoto Convention on the Simplification and
Harmonization of Customs Procedures; electronic SPS certification (e-cert); electronic certificates of
origin; mutual recognition arrangements on conformity assessment of electrical and electronic
equipment parts; and corporate governance. The Bangkok Declaration in October 2003 reaffirmed
the primacy of the multilateral trading system and pressed for an ambitious and balanced outcome to
the DDA, including taking concrete steps to make APEC's trade agenda more supportive of the work
of the WTO and to advance free trade in a coordinated manner among multilateral, regional, and
bilateral frameworks so that they are complementary and mutually reinforcing.16
(c) ASEM
26. Singapore has been an active participant in the Asia Europe Meetings (ASEM), since ASEM's
establishment in 1996. ASEM is an informal process of dialogue and cooperation between the
European Commission, the fifteen European Union members and ten Asian countries.17Under the
ASEM Trade Facilitation Action Plan (TFAP), Singapore is co-facilitator (with Belgium) for the
priority area of distribution; the TFAP aims at the reduction and removal of non-tariff barriers to
trade between the two regions.18Singapore is also represented on the Taskforce on Closer Economic
Partnership, which aims to define the outcome of closer integration and cooperation between the two
regions, specifically in finance, trade, and investment. There have been four ASEM Summits thus far.
(iii) Bilateral agreements
27. While remaining a strong supporter of the multilateral trading system, Singapore also believes
that trade efforts made in regional and bilateral fora may accelerate the momentum for trade
liberalization and, in turn, strengthen the multilateral trading system. Thus, since 2000, Singapore has
signed bilateral free-trade agreements with New Zealand (14 November 2000, effective
1 January 2001), Japan (13 January 2002, effective 30 November 2002), the European Free Trade
Association (EFTA) (26 June 2002, effective 1 January 2003)19, Australia (17 February 2003,
effective 28 July 2003), and the United States (6 May 2003, effective 1 January 2004). In addition to
improving market access for goods and services, negotiations have focused on investment, intellectual
property rights, and other trade-related issues such as competition policy (Table II.2).
15APEC (2001).
16APEC (2003).
17The Asian countries are: Brunei Darussalam, China, Indonesia, Japan, South Korea, Malaysia, the
Philippines, Singapore, Thailand, and Viet Nam.
18The TFAP comes under the Economic Pillar of ASEM, which also includes dialogue on WTO
issues; the Investment Promotion Action Plan (IPAP); the Asia-Europe Business Forum (AEBF); the ASEM
Trust Fund; and the European Financial Expertise Network (EFEX).
19The members of the EFTA are: Iceland, Liechtenstein, Norway, and Switzerland.Singapore WT/TPR/S/130
Page 23
Table II.2
Elements of Singapore's bilateral free-trade agreements
Agreement/
SectorANZSCEP JSEPA ESFTA SAFTA USSFTA
Agreement between
Singapore and New
Zealand on a Closer
Economic
Partnership, in force
since January 2001.
To be reviewed
biannually.Agreement between
Singapore and
Japan for a New-
Age Economic
Partnership in force
since November
2002.
To be reviewed
annuallyAgreement between
Singapore and
EFTA states in
force since January
2003.
To be reviewed
biannually.Agreement between
Singapore and
Australia in force
since July 2003.
To be reviewed
annually.Agreement
between
Singapore and the
United States in
force since
January 2004.
To be reviewed
annually.
Goods Elimination of
customs duties on
date of entry into
force.Singapore
eliminated all
remaining customs
duties on imports
from Japan on entry
into force.
Based on a positive
list. For most
exports to Japan,
tariff elimination is
immediate. For the
rest, tariff
elimination is
phased over a 3½ to
8-year period.Elimination of
duties on industrial
goods on entry into
force.
Liberalization of
duties on
agricultural goods
based on positive
list and on
agreements with
each EFTA state;
duties on processed
agricultural and fish
products to be
liberalized based on
positive lists with
each EFTA state.Elimination of
customs duties on
entry into force.Based on a
positive list.
Singapore
eliminated all
remaining
customs duties on
imports from the
United States on
entry into force.
For most exports
to the United
States, immediate
tariff elimination,
and a transition
period of 3 to10
years for others.
Services Based on a positive
list and to be
reviewed with the
goal of free trade in
services by 2010.
Preferential
treatment extended
to non-parties
engaged in
"substantive
business operations"
in either of the
parties. Singapore's
commitments
beyond GATS
include
professional,
telecommunications
financial, business,
and transport
services.Based on a positive
list; preferential
treatment also
extended to non-
parties engaged in
"substantive
business operations"
in either of the
parties. Singapore’s
commitments
beyond GATS
include
professional,
telecommunication,
financial, business,
and transport
services.Based on a positive
list and to be
reviewed with the
goal of eliminating
substantially all
remaining
restrictions in
services covered at
the end of ten years.
Singapore’s
commitments
beyond GATS
include
professional,
telecommunication,
financial, business,
and transport
services.Based on a negative
list; exceptions to
market access and
national treatment
listed in annexes.
Preferential
treatment extended
to non-parties
engaged in
"substantive
business operations”
in either of the
parties. Singapore's
commitments
beyond GATS
include
professional,
telecommunication,
financial, business,
and transport
services.Based on a
negative list, with
exceptions to
market access and
national treatment
listed in annexes.
Singapore’s
commitments
beyond the GATS
include
professional,
telecommuni-
cations, financial,
business, and
transport services.
Contingency
measuresNo right to take
safeguard measures
against each others'
imports; anti-
dumping provisions
are stricter than
those applied under
GATT Article VI.May take
emergency
measures against
each others' imports
only during the 10-
year transition
period; anti-
dumping measures
to be in accordance
with GATT
Article VI.May take
emergency
measures against
each others' imports
but not anti-
dumping measures.No right to take
safeguard measures
against each others'
imports; anti-
dumping rules are
stricter than those
applied under
GATT Article VI.Safeguard
measures may be
taken during the
ten-year transition
period; anti-
dumping measures
may be taken in
accordance with
GATT Article VI.
Table II.2 (cont'd)WT/TPR/S/130 Trade Policy Review
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Agreement/
SectorANZSCEP JSEPA ESFTA SAFTA USSFTA
Intellectual
property rightsWTO TRIPS
Agreement
provisions to apply.WTO TRIPS
Agreement
provisions to apply.
Cooperation on IPR
matters, including
through a Joint
Committee.WTO TRIPS
Agreement
provisions to apply.WTO TRIPS
Agreement
provisions to apply.
Cooperation inter
aliaon enforcement
and education.Singapore to
accede to
international
conventions
including WIPO
Copyright Treaty,
WIPO
Performances and
Phonographs
Treaty, and
UPOV. TRIPS-
plus provisions
include extending
copyright
protection to life
of author plus 70
years, measures
against the
circumvention of
technologies that
protect copyright
works, protection
of well-known
marks, extension
for unreasonable
curtailment of
patent term for
pharmaceutical
products due to
delays in
marketing
approval process.
Competition Commitment to
creating and
maintaining open
and competitive
markets;
endeavouring to
implement the
APEC Principles to
Enhance
Competition and
Regulatory reform.
Parties also agreed
to consult with each
other in the
development of any
new competition
measures.Cooperation on
controlling anti-
competitive
practices including
the exchange of
information on such
practices.Cooperation
through
consultations on
eliminating anti-
competitive
business practices.Commitment to
promote
competition by
addressing anti-
competitive
practices including
through consultation
and review. Within
six months of a
generic competition
law being enacted
by Singapore, a
review of the
competition
provisions of the
FTA to be
conducted.Commits
Singapore to
enacting generic
competition
legislation by
2005 and ensuring
that GLCs do not
engage in
agreements that
restrain
competition or in
exclusionary
practices that
substantially
lessen
competition.
Investment Provisions apply to
all goods and those
services listed in the
parties' schedules.Provisions apply to
all goods and those
services listed in the
parties' schedules.
Performance
requirements are
prohibited.Provisions on
investment do not
apply to measures
affecting trade in
services and to
investors investing
in services (subject
to a review after ten
years).Provisions apply to
all goods and
services (except
where reservations
have been listed by
the parties).Negative list for
goods and
services except
those scheduled,
and detailed
investor-state
dispute settlement
provisions.
Performance
requirements are
prohibited.
Table II.2 (cont'd)Singapore WT/TPR/S/130
Page 25
Agreement/
SectorANZSCEP JSEPA ESFTA SAFTA USSFTA
Government
procurementSingle market
between the two
parties for
procurement valued
at over SDR 50,000.Provisions of the
WTO GPA apply.
Procurement
threshold of SDR
100,000.Provisions of the
WTO GPA apply.Single market
between the two
parties.Preferences up to
S$102,710 for
goods and
services for
Ministries
(S$910,000 for
statutory boards),
and S$11,376,000
for construction
services
Others Provisions on
labour and
environment.
Note: Details of rules of origin under these agreements are provided in Chapter III (Table III.3).
Source: WTO Secretariat, based on the texts of Singapore's bilateral FTAs.
28. In general, Singapore's commitments on services under its bilateral FTAs have gone beyond
its GATS commitments, including in financial services, business and professional services,
telecommunications, education, and environmental services. In addition, the FTA with the United
States is the only one of Singapore's FTAs to contain provisions on trade and labour and trade and
environment issues. The commitments, which appear to be based on NAFTA provisions, include
commitments to ensure that labour and environment laws are properly enforced and neither party
weakens these laws. It also contains commitments on the transfer of capital and the avoidance of
capital controls; any restrictions that "substantially impede transfers" become subject to damages
claims. The FTA with the United States also commits Singapore to enact general competition policy
legislation by 2005 and to ensure that all enterprises, including government enterprises, are subject to
competition disciplines. Rules of origin within Singapore’s bilateral agreements are detailed and
complicated. They appear to follow the rules established in other agreements such as the Australia-
New Zealand CER Agreement (for example Singapore's bilateral agreements with New Zealand and
Australia Singapore), NAFTA (for example the bilateral FTAs with Japan and the United States), and
European rules of origin (the agreement with the EFTA states), but also take into account specificities
within each contracting party. They range from the general, value-added criteria (the agreements with
New Zealand and Australia) to detailed, product-specific rules (agreements with Japan, the U.S. and
the EFTA states).20Since Singapore's tariff, with the exception of six tariff lines, is duty free, the
burden of complying with the rules of origin is primarily on Singapore-based exporters to gain
preferential access to the markets of their bilateral trade partners.
(iv) Other preferences
29. Under the Generalized System of Preferences (GSP), exports from Singapore receive duty-
free or preferential access to the markets of Belarus, Canada, the Czech Republic, Hungary, Norway,
the Russian Federation, and the Slovak Republic; Singapore was graduated out of Japan's GSP
programme in April 2000. Singapore also grants preferences to (and receives them from) Mauritius
under the Commonwealth Preference (CP) scheme. No data were available on the annual value of
Singapore's exports or imports under either the GSP or the CP schemes.
20In the case of the FTA with the United States, for example, the annex on product-specific rules of
origin is almost 300 pages.WT/TPR/S/130 Trade Policy Review
Page 26
(5) FOREIGN INVESTMENT REGIME
(i) Overview
30. Foreign direct investment in Singapore is liberalized with regard to manufacturing activities;
thus, the main changes to the FDI regime since its previous Trade Policy Review have been in
services. In financial services, a 40% limit on foreign shareholding of local banks was lifted in 1999,
and a 70% limit on foreign ownership of Stock Exchange of Singapore (SES) Members was removed
and new entrants were allowed to become members of the renamed Singapore Exchange-Securities
Trading (SGX-ST) by January 2002. In telecommunications services, foreign ownership restrictions
of up to 73.99% of equity (49% direct and 24.99% indirect) were lifted on 1 April 2000. Foreign
investment limits have been maintained in broadcasting and newspaper services. In broadcasting, FDI
is allowed up to 49%, unless waived by the Minister for Information, Communication and the Arts;
individual ownership of shares issued by broadcasting and newspaper companies was raised from 3%
to 5% on 2 September 2002, or higher, with prior approval. There are also restrictions on foreign law
firms and foreign lawyers practising in Singapore. Foreign lawyers are prohibited from practising
Singapore law and foreign law firms cannot employ Singapore-qualified lawyers to practise
Singapore law. Foreign investment in some of Singapore's government linked companies (GLCs),
depending on the sectors they operate in, is also subject to restrictions. For example, the aggregate
foreign shareholding limit in PSA Corporation, which manages Singapore's ports, is 49%. Foreign
ownership restrictions may also apply to Singapore designated airlines depending on the requirements
of Singapore's bilateral and multilateral air services agreements.21
31. Foreign persons can purchase private residential property in an approved condominium
development or any unit within a building of six or more levels or any non-residential, commercial or
industrial property. In addition, foreign nationals who are permanent residents are permitted to buy
public housing built by the Housing Development Board (HDB) from the open market. Foreign
persons are restricted under the Act from freely purchasing restricted residential properties (landed
properties such as bungalows, semi-detached houses, terrace houses, and flats in building of less than
six levels), unless permitted by the Controller of Residential Property, Land Deaings (Approval)
Unit.22The main criteria for approval are whether the applicants are permanent residents of
Singapore and their economic contribution to Singapore.
32. Singapore maintains no restrictions on portfolio investment or on outward FDI.
(ii) Legislation and incentives
(a) Legislation
33. While there is no specific legislation relating to foreign investment, investors, like all other
firms, need to register under the Companies Act or Business Registration Act (Chapter III).
(b) Incentives
34. In order to attract foreign investment, Singapore feels that it is necessary to offer not just a
stable macroeconomic and business environment for companies to operate in, but also a range of
21In addition, individual investors (local and foreign) in the following companies are subject to equity
ownership limits: Singapore Technologies Engineering (15%); PSA Corporation (5%); Singapore Airlines
(5%); and Singapore Power, Power Grid, Power Supply and Power Gas (10%).
22Foreign persons are defined under the Residential Property Act to mean any person who is a non-
Singapore citizen, any foreign company or society .Singapore WT/TPR/S/130
Page 27
incentives. Incentives for investment are provided mainly under two Acts, the Economic Expansion
Incentives (Relief from Income Tax) Act (Cap 86) and the Income Tax Act (Cap 134). The incentives
usually include concessional corporate tax rates of between 5% and 15% (the normal rate is 22%) or
corporate income tax exemptions, depending on the scheme. Several schemes also give tax breaks on
income from royalties or relief from withholding tax on royalties, in an attempt to attract foreign
investment in high-value-added sectors (Chapter III(4)(ii) and Table III.7). Non-tax incentives
include grants for certain activities (at present especially those relating to promoted high-value-added
sectors), training, and R&D (Table AIII.4). In addition, incentives are provided for investors in
several services, including financial services, tourism, media services, and telecommunications
(Chapter IV).
(iii) International agreements
(a) Investment agreements
35. Since its previous Review in 2000, Singapore has signed investment agreements with Belarus
(15 May 2000), Mauritius (4 March 2000), Zimbabwe (1 September 2000), Peru (27 February 2003),
Uzbekistan (15 July 2003), Bulgaria (15 September 2003) and Bahrain (27 October 2003). All but the
agreements with Zimbabwe, Bulgaria and Bahrain have come into force. Agreements previously
signed with Cambodia (4 November 1996), and Slovenia (25 January 1999) entered into force
in 2000. In its investment protection agreements and preferential trade agreements, Singapore has
also undertaken not to expropriate investments unfairly. The authorities state that as there is currently
no WTO Agreement on investment, Singapore does not have any WTO obligations on investment
matters.
(b) Taxation agreements
36. Since 2000, Singapore has signed agreements to avoid double taxation with Cyprus (signed
on 24 November 2000 and ratified on 8 February 2001); Denmark (signed 3 July 2000, ratified
21 December 2000); Austria (signed 30 November 2001, ratified 22 October 2002); Finland (signed
7 June 2002, ratified 27 December 2002); Kuwait (signed 21 February 2002, ratified 2 July 2003);
Romania (signed 21 February 2002, ratified on 28 November 2002); Russia (signed
9 September 2002); Mongolia (signed 10 October 2002); Oman (signed 6 October 2003); Lithuania
(signed 18 November 2003); and Hong Kong, China (signed 28 November 2003).