5 JUNE 1996
POLICY REVIEW BODY: REVIEW OF SINGAPORE
TPRB'S EVALUATION Back to top
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),
TRADE POLICY REVIEW BODY: REVIEW OF
CONCLUDING REMARKS BY THE CHAIRPERSON Back
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
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
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
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.
- 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.
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
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
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