U.S.-Singapore Free Trade Agreement: Potential Economywide and PDF
Preview U.S.-Singapore Free Trade Agreement: Potential Economywide and
U.S. International Trade Commission COMMISSIONERS Deanna Tanner Okun, Chairman JenniferA. Hillman, Vice Chairman Marcia E. Miller Stephen Koplan RobertA.Rogowsky DirectorofOperations RobertB.Koopman DirectorofEconomics Address all communications to Secretary to the Commission United States InternationalTrade Commission Washington, DC 20436 U.S. International Trade Commission Washington,DC20436 www.usitc.gov U.S.-Singapore Free Trade Agreement: Potential Economywide and Selected Sectoral Effects Investigation No. TA-2104-6 Publication 3603 June 2003 Thisreportwasprincipallypreparedby CountryandRegionalAnalysisDivision AronaM.Butcher,Chief AronaM.Butcher,ProjectLeader SoamielyAndriamananjara,MichaelBarry,NannetteChrist,KyleJohnson, DianeManifold,andMarinosTsigas OfficeoftheGeneralCounsel WilliamW.Gearhart OfficeofIndustries HeidiColby-Oizumi,IndustriesCoordinator LauraBloodgood,QueenaFan,LisaFerens,EricForden,ChristopherJohnson,DennisLuther, ChristopherMelly,MichaelNunes,andCynthiaTrainor OfficeofTariffAffairsandTradeAgreements JanisSummers Supportingassistancewasprovidedby: PatriciaM.Thomas PREFACE On February 28, 2003, the United States International Trade Commission (the Commission) instituted investigation No. TA-2104-6, U.S.-SingaporeFreeTrade Agreement:PotentialEconomywideandSelectedSectoralEffects.The investigation, conductedundersection2104(f)oftheTradeActof2002,wasinresponsetoarequest fromtheUnitedStatesTradeRepresentative(seeAppendixA). ThepurposeofthisinvestigationistoadvisethePresidentandtheCongressastothe potential effects of the U.S.-Singapore free trade agreement (FTA). In particular, section 2104(f)(2) of the Trade Act provides that the Commission is to submit to the PresidentandtheCongress(notlaterthan90calendardaysafterthePresidententers into the agreement) a report providing an assessment of the likely impact of the agreement on the United States economy as a whole and on specific U.S. industry sectorsandtheinterestsofU.S.consumers.Section2104(f)(3)alsoprovidesthatthe Commission, in preparing its assessment, review available economic assessments regarding any substantially equivalent proposed agreement and discuss areas of consensus and divergence between the various analyses and conclusions, including thoseoftheCommissionregardingtheagreement. TheCommissionsolicitedpubliccommentforthisinvestigationbypublishinganoticein theFederalRegisterofMarch21,2003(seeAppendixB)andholdingapublichearing onApril24,2003(seeAppendixCforthehearingCalender).Interestedpartyviews aresummarizedinChapter9ofthisstudy. i TABLE OF CONTENTS Page Preface ...................................................... i ExecutiveSummary ............................................. ix Chapter1.Introduction .......................................... 1 Purposeofthereport ....................................... 1 Scopeofthereport ........................................ 2 Approachofthereport ..................................... 2 Organizationofthereport ................................... 4 Chapter2.OverviewoftheU.S.-SingaporeFTA ....................... 5 Scopeofchapter .......................................... 5 Briefsummaryoftreatyprovisions ............................. 5 Introduction ............................................ 5 Summaryoftariffcommitments ............................. 6 Chapter-by-chapterreview ............................. 6 Chapter1:EstablishmentandDefinitions ................ 6 Chapter2:NationalTreatmentandMarketAccess ....... 7 Chapter3:RulesofOrigin .......................... 8 Chapter4:CustomsAdministration .................... 10 Chapter5:TextilesandApparel ...................... 10 Chapter6:TechnicalBarrierstoTrade ................. 11 Chapter7:Safeguards ............................. 11 Chapter8:Cross-BorderTradeinServices .............. 11 Chapter9:Telecommunications ...................... 12 Chapter10:FinancialServices ....................... 12 Chapter11:TemporaryEntryofBusinessPersons ......... 13 Chapter12:AnticompetitiveBusinessConduct,Designated Monopolies,andGovernmentEnterprises ............. 13 Chapter13:GovernmentProcurement ................. 14 Chapter14:ElectronicCommerce ..................... 14 Chapter15:Investment ............................. 14 Chapter16:IntellectualPropertyRights ................. 15 Chapter17:Labor ................................. 16 Chapter18:Environment ............................ 16 Chapter19:Transparency........................... 17 Chapter20:AdministrativeandDisputeSettlement........ 17 Chapter21:GeneralandFinalProvisions ............... 18 iii TABLE OF CONTENTS-Continued Page Chapter3:OverviewofSingapore’sEconomy,Trade, andInvestmentPatterns ........................................ 19 Introduction .............................................. 19 Singapore’seconomy ..................................... 19 Majorindustries ...................................... 21 Singapore’stradepattern .............................. 23 TradeflowswiththeUnitedStates ........................ 23 Servicestrade ............................................ 25 InvestmentrelationshipwiththeUnitedStates ............... 31 Investmentpatterns ....................................... 31 Regionalandeconomiccooperation ........................... 32 Multilateralcooperation ................................... 32 Bilateralcooperation ..................................... 34 Chapter4: ReviewofLiterature ................................... 37 Introduction .............................................. 37 Generaleffectsoftradeagreements ........................... 37 Staticeffects:TradecreationandTradediversion ............... 37 Staticeffects: Termsoftrade ............................... 38 Scaleeffects ............................................ 38 Politicaleffects .......................................... 39 ImpactontheUnitedStatesofU.S.-SingaporeFTA ................ 40 ImpactontheUnitedStatesofotheractualorpotential SingaporeFTAs ......................................... 43 Comparisonofeconomicwelfareimpacts ....................... 49 Chapter5: ImpactofEliminatingTariffs ............................. 53 Introduction .............................................. 53 Summaryoffindings ....................................... 53 Generalequilibriumanalysis ................................. 54 Databaseandaggregation ................................ 54 Simulationdesign ........................................ 55 Projectedbaseline .................................... 57 Policyexperiment..................................... 58 Simulationresults ........................................ 60 Tradevolumes ....................................... 61 Domesticproduction .................................. 64 Pricespaidbyconsumers .............................. 66 Economicwelfareandgrossdomesticproduct .............. 67 Chapter6:ImpactofaU.S.-SingaporeFTAonselectedsectors ........... 69 Textilesandapparel ....................................... 69 Overview .............................................. 69 U.S.industry ........................................ 70 iv TABLE OF CONTENTS-Continued Page Chapter6:ImpactofaU.S.-SingaporeFTAofselectedsectors–Continued IndustryinSingapore ................................. 71 PotentialimpactonU.S.imports ......................... 72 PotentialimpactonU.S.exports ......................... 74 Expressdeliveryservices .................................... 75 Overview .............................................. 75 U.S.industry ........................................ 75 IndustryinSingapore ................................. 76 PotentialimpactonU.S.imports ............................. 76 PotentialimpactonU.S.exports ............................. 77 Financialservices .......................................... 78 Overview .............................................. 78 U.S.industry ........................................ 78 IndustryinSingapore ................................. 79 PotentialimpactonU.S.imports ............................. 79 PotentialimpactonU.S.exports ............................. 80 Professionalservices ....................................... 82 Overview ........................................... 82 U.S.industry ........................................ 82 IndustryinSingapore ................................. 83 PotentialimpactonU.S.imports ............................. 84 PotentialimpactonU.S.exports ............................. 84 Telecommunicationsservices ................................. 87 Overview .............................................. 87 U.S.industry ........................................ 87 IndustryinSingapore ................................. 88 PotentialimpactonU.S.imports ............................. 88 PotentialimpactonU.S.exports ............................. 89 Chapter7: ImpactofaU.S.-SingaporeFTAonIntellectualPropertyRights .. 91 CurrentconditionsofIPRprotectioninSingapore ................. 91 MajorIPRprovisionsoftheU.S.-SingaporeFTA ................... 95 Copyrights ............................................. 95 Trademarks ............................................ 97 Patentsandtradesecrets .................................. 98 Enforcement ............................................ 98 Potentialeffects ........................................... 99 Chapter8: ImpactofaU.S.-SingaporeFTAonInvestment .............. 101 U.S.-Singaporeinvestment ................................... 101 MajorinvestmentprovisionsoftheU.S.-SingaporeFTA ............. 103 Disputesettlement ........................................ 106 v TABLE OF CONTENTS-Continued Page Chapter8: ImpactofaU.S.-SingaporeFTAonInvestment–Continued Nonconformingmeasures ................................. 107 Potentialeffects ........................................... 110 Chapter9: SummaryofViewsofInterestedParties .................... 113 AirCourierConferenceofAmerica ........................... 113 AmericanCouncilofLifeInsurers,American InsuranceAssociation,andFinancialServices CoordinatingCouncil ..................................... 114 AmericanDehydratedOnionandGarlicAssociation .............. 114 AmericanFederationofLaborandCongressofIndustrial Organizations .......................................... 115 TheBoeingCompany ....................................... 116 Citigroup ................................................ 117 DirectSellingAssociation .................................... 117 DiscoveryCommunications,Inc. ............................... 118 ElectronicIndustriesAlliance ................................. 119 EntertainmentIndustryCoalitionforFreeTrade ................... 119 GeneralElectricCompany ................................... 120 GovernmentofSingapore ................................... 121 InternationalIntellectualPropertyAlliance ....................... 122 InvestmentCompanyInstitute ................................. 122 LeatherIndustriesofAmerica,Inc. ............................. 123 PharmaceuticalResearchandManufacturersofAmerica ........... 124 SecuritiesIndustryAssociation ................................ 125 SemiconductorIndustryAssociation ............................ 125 TelecommunicationsIndustryAssociation ........................ 126 TileCouncilofAmerica,Inc................................... 127 UnitedParcelService ....................................... 127 U.S.ChamberofCommerce ................................. 128 U.S.-SingaporeFTABusinessCoalition .......................... 128 Wal-MartStores,Inc. ....................................... 129 Appendixes A. RequestLetter ............................................. A-1 B. FederalRegisternotice ...................................... B-1 C. HearingParticipants........................................ C-1 D. Technicalappendix ........................................ D-1 Figures ES-1. U.S.merchandisetradewithSingapore: Imports,exports,andtrade balance ............................................... xiii ES-2.U.S.exportstoSingapore,2002 .............................. xiii ES-3.U.S.importsfromSingapore,2002 ............................ xiv ES-4.U.S.directinvestmentinSingapore,byindustrysector,2001 ........ xiv vi
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