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Singapore: June 1996

“ Singapore's economic environment since 1992 was one of rapid economic growth, low unemployment and high competitiveness due to its open, liberal and market-oriented regime.”

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First press release
Summary of Secretariat report
  > Summary of Government report

5 JUNE 1996

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The Trade Policy Review Body of the World Trade Organization (WTO) conducted its second review of Singapore's trade policies on 3 and 4 June 1996. The text of the Chairman's concluding remarks is attached as a summary of the salient points which emerged during the two-day discussion.

The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member country at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including: its domestic laws and regulations; the institutional framework; bilateral, regional and other preferential agreements; the wider economic needs and the external environment.

A record of the discussions and the Chairman's summing-up, together with these two reports, will be published in due course as the complete trade policy review of Singapore and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992), Australia (1989 & 1994), Austria (1992), Bangladesh (1992), Bolivia (1993), Brazil (1992), Cameroon (1995), Canada (1990, 1992 & 1994), the Czech Republic (1996), Chile (1991), Colombia (1990), Costa Rica (1995), Côte d'Ivoire (1995), the Dominican Republic (1996), Egypt (1992), the European Communities (1991, 1993 & 1995), Finland (1992), Ghana (1992), Hong Kong (1990 & 1994), Hungary (1991), Iceland (1994), India (1993), Indonesia (1991 and 1994), Israel (1994), Japan (1990, 1992 & 1995), Kenya (1993), Korea, Rep. of (1992), Macau (1994), Malaysia (1993), Mauritius (1995), Mexico (1993), Morocco (1989 & 1996), New Zealand (1990), Nigeria (1991), Norway (1991), Pakistan (1995), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992), Senegal (1994), Singapore (1992 & 1996), Slovac Republic (1995), South Africa (1993), Sri Lanka (1995), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand (1991 & 1995), Tunisia (1994), Turkey (1994), the United States (1989, 1992 & 1994), Uganda (1995),

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The Trade Policy Review Body has now completed the second review of Singapore's trade policies and practices. These remarks, made on my own responsibility, summarize the main points of the discussion. They are not intended to substitute for the collective evaluation and appreciation of Singapore's trade policies and practices. Details of the discussion will be reflectedin the minutes of the meeting.

The discussion developed under three main themes: (i) Singapore's open trade policy and its

contribution to development; (ii) Singapore's role in multilateral and regional trade; and (iii) specific questions.

Open trade policy and development

Members noted that Singapore's economic environment since 1992 was one of rapid economic growth, low unemployment and high competitiveness due to its open, liberal and market-oriented regime. Note was taken of Singapore's stable macro-economic management, with low inflation and high savings and investment rates. Questions were asked regarding the relationship between the appreciation of the exchange rate and the maintenance of Singapore's competitive position in the world economy.

Members questioned the relationship between Singapore's free trade goals and its active industrial policy, including "industrial clusters" for investment in strategic projects. They asked about the investment incentives and export subsidies administered by the Economic Development Board, in the light of WTO rules regarding TRIMS and subsidy practices. Noting the rapid development of intra-Asian trade, some Members encouraged Singapore to seek closer links with other geographic areas, including Latin American partners and countries in transition.

In response, the representative of Singapore said that the Government played a critical rôle in helping the economy realise its potential by responding vigorously and creatively to the changing environment. While Singapore fully subscribed to the free market mechanism, the Government had never hesitated to exercise its responsibility especially in areas beyond the scope of the private sector. The Government worked closely with the private sector to promote economic development, although finding the right balance had evolved over time. Now that the economy was more mature, the Government was progressively privatizing a number of companies.

He said that exchange rate policy was not targeted at maintaining the current account or trade balance; rather monetary policy was designed to offset imported inflation. However, Singapore's low inflation and strong currency were also a consequence of financial prudence. Statutory boards and government-linked companies followed a strict discipline of commercial viability.

Diversification of trade and investment towards Latin America and economies in transition was now beginning with the establishment of investment guarantee and double taxation agreements laying the foundation for economic co-operation.

The representative gave details of Singapore's notifications to the Committee on Subsidies, and noted the Government was progressively phasing out export subsidies. Investment incentives were generally available. No fiscal incentives applied in the free zones.

Singapore's role in multilateral and regional trade

Members commended Singapore's participation in the Uruguay Round. In view of its active rôle and its commitment to the multilateral trading system, it was fitting that the first WTO Ministerial Conference be held in Singapore. Participants noted Singapore's rôle as among the most prosperous of the developing countries and pointed to the implications of this as well as the responsibilities it confers.

While acknowledging that most imported items enter duty free, many Members asserted that the scope of Singapore's Uruguay Round tariff bindings (some 70 per cent of tariff lines) could be further improved. Singapore was asked to clarify its intentions regarding adoption of the WTO Customs Valuation Agreement and to describe the main points of legislation now being elaborated on anti-dumping and countervailing measures. Members also asked what measures had been taken to ensure the compliance with the TRIPs Agreement of the new Patents Act.

Members sought information on the rôles of the Ministry of Trade and Industry and other agencies in regulating trade in services, and questioned the openness of financial and telecommunication services, noting restrictions on access of foreign banks to the domestic financial services market and foreign ownership restrictions on basic telecommunication services.

Noting plans to reduce all tariffs on intra-ASEAN trade to 0 - 5 % by the year 2003, Members encouraged ASEAN members, including Singapore, to ensure that AFTA remained outwardly focused and continued the trend towards trade liberalization in the region. They noted that regional trade liberalization could complement multilateral trade liberalization and asked Singapore to indicate the aims and objectives of AFTA concerning "open regionalism". Members also asked Singapore to indicate the main characteristics of its preferential rules of origin. Relating to Singapore's "regionalization" policy for trade and investment, Members asked Singapore to indicate the impact of such policy on its trade activity.

The representative of Singapore said that Singapore would implement the Uruguay Round Agreements in accordance with its commitments. Specifically:

-    The revised Patents Law, which was consistent with the TRIPS agreement, entered into force from 1 January 1996, and other intellectual property areas were under examination. A new Trade Marks Act and Asean co-operation on intellectual property would cover other concerns.

-    Singapore was studying the changes needed to the Customs Act to fulfil the Customs Valuation Agreement.

-    Singapore was ready to negotiate further increases in tariff bindings in future multilateral negotiations.

-     Details were given of new anti-dumping legislation to be submitted to Parliament shortly.

Regarding services, the representative of Singapore noted provisions for intra-corporate transferees and for professional services; foreign law firms could practice offshore law. Remaining restrictions should be addressed in the further liberalization envisaged under GATS. In financial services, foreign content was probably higher than in most countries; however, for monetary policy reasons, the Singapore authorities considered it would be imprudent to allow foreign institutions to monopolize the sector. Domestic banking and insurance were already saturated; however, Singapore was open to foreign companies to operate as offshore banks, merchant banks and reinsurance companies, as bound under GATS. On telecommunications, he underlined that Singapore had brought forward the expiry of the basic telecommunications monopoly from 2002, as offered in GATS negotiations, to 2000; the 49 per cent foreign shareholding was more liberal than in most countries.

On regional trade, the representative noted that the AFTA common external preferential tariff had been notified to the WTO under the Enabling Clause. 40 per cent Asean content was the basic rule of origin.

Specific questions

Members noted the comparatively high share of Government revenue from customs and excise duties, despite the fact that most goods are imported duty free. Noting the high level of excise duties on alcohol, some Members questioned their effects on tourism.

Members questioned the rôle of the import permit system and asked for details on the criteria used for granting import licences for certain products and on import licensing fees.

Members asked whether any standards had been established or were being considered for the Green Labelling Scheme, and sought information on non-product related processes and production methods used as labelling criteria. They also asked to what extent foreign producers could be involved in setting marking, labelling and packaging requirements under the Scheme and sought clarification of "internationally approved testing procedures".

Members also sought clarification on TRIMs applied by Singapore. In addition, they asked how the authorities coped with anti-competitive practices in the absence of competition laws in Singapore.

In reply to the specific questions, the representative of Singapore noted that high duties on vehicles, alcohol and tobacco sought to discourage their use: revenue generation was not the aim. The import permit system was for registration and was not a protective measure. Import licensing was imposed under international agreements or for public health, safety or morality, environmental and security reasons; fees were levied on the basis of costs of services provided. The representative gave details of standards, testing and certification provisions, including the voluntary green labelling scheme. He noted that no TRIMs were maintained in Singapore and stated that all required notifications to the WTO will be made in accordance with the respective Agreements.


Overall, Members were very favourably impressed by the openness and dynamism of the Singapore economy; recent growth rates in the manufacturing and services sectors were particularly noted. Innovatory policy and administrative approaches developed by Singapore in a number of key sectors were commented on.

Some Members were interested in the general approach that conditions policy making in Singapore as well as in Singapore's sense of economic identity, given the combination of high GDP per capita and its status as a developing country. Areas where there was felt to be room for further progress included the scope of tariff bindings and reducing remaining restrictions in the financial services sector.

Finally, Members expressed their appreciation of the leading rôle which Singapore continues to play in the WTO, and were confident that as host country Singapore would make an important contribution to the success of the first WTO Ministerial Conference in December 1996. Back to top