Singapore WT/TPR/S/14
Page 17
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES
(1) General Framework
1. Singapore hasaparliamentary system ofgovernment. Under theConstitution, theexecutive
power isvested inthePresident, whoiselected directly bythepeople toserve asix-year termasthe
Head ofState. ThePresident appoints asPrime Minister aMember ofParliament fromthemajority
party. Healsoappoints theCabinet members fromamong parliamentarians ontheadvice ofthePrime
Minister. TheHead ofStatemaydissolve Parliament ontherecommendation ofthePrime Minister.
TheCouncil ofPresidential Advisers advises thePresident onanumber ofhisorherfunctions.
2. There isaunicameral, 81-member Parliament which exercises legislative authority. Parliament
iscomposed ofelected Members andnominated Members. Nominated Members, whocannot exceed
sixinnumber, areappointed bythePresident. TheParliament hasamaximum constitutional term
offiveyears, butcanbedissolved earlier.
3. Executive authority isexercised bytheCabinet, chaired bythePrime Minister. TheCabinet
currentlycomprises14Ministers.PolicyformulationandimplementationisundertakenbytheMinistries.
These areempowered toissueRegulations, published intheGovernment Gazette, ontheimplementation
oflaws. Acting onbehalf oftheCabinet, thePrime Minister andother Ministers areempowered to
introduce billsandbudget proposals toParliament including matters relating toforeign andtradeaffairs.
TheSenior Minister advises Ministers onanyofthesubjects under theircharge.
4. Alllaws, including tradeandtrade-related legislation, havetobeapproved byCabinet before
being senttoParliament, must bepassed byParliament andmust receive Presidential assent.
5. Judicial power isexercised through theSupreme Court. TheCourt ofAppeal isthehighest
tribunal inSingapore 'sjudicial hierarchy; thecourt comprises theChief Justice andtwofull-time
Appellate Judges. Ontheadvice ofthePrime Minister, thePresident appoints theChief Justice. The
Constitution isSingapore 'shighest law,followed byActsandministerial regulations made pursuant
toActs International treaties, including theWTO obligations onceincorporated intodomestic law,
havethesame status asother domestic laws. Conflicts between international obligations andnational
lawsareavoided bybringing domestic legislation intoconformity withatreaty before itsratification.
Implementing legislation requires theapproval ofParliament.
(2) Structure ofTrade Policy Formulation andImplementation
(i) Legislative andExecutive branches ofGovernment
6. According totheauthorities, there havebeennomajor changes since Singapore 'sprevious
Trade Policy Review in1992 inthestructure androleoftheGovernment andother agencies inthe
formulation, co-ordination andimplementation oftrade andtrade-related policies inSingapore. The
structure ofthetrade andtrade-related government organizations isshown inChart II.1.WT/TPR/S/14
Page 18Trade Policy Review
7. TheMinistry ofTrade andIndustry (MTI) isresponsible fortheformulation oftrade policy
(Chart II.2). TheSingapore Trade Development Board (TDB) isthestatutory board responsible for
theimplementation oftrade policies andmeasures andprogrammes fortrade development.1The
EconomicDevelopmentBoard(EDB)isthestatutoryboardresponsiblefortheimplementationofpolicies
oninvestment incentives. TheEDB willwork jointly withanewly proposed board -Singapore
Productivity andStandards Board -where workers 'training andproductivity, andthedevelopment
oflocal, small- and-medium sized enterprises areconcerned. Thetaskofpromoting research and
development isundertaken byboththeEDBandtheNational Science andTechnology Board (NSTB).
TheSingapore Institute ofStandards andIndustrial Research (SISIR) isincharge ofsetting standards
forindustry including theelectrical, electronics, mechanical, building, construction, industrial safety,
chemical, andfoodpackaging sectors.
1There aremore than100statutory boards inSingapore. They areestablished under separate legal statutes
governed byActs. Although theemployees arenotcivilservants, theyaredeemed tobepublic servants for
thepurpose ofthePenal Code.Singapore WT/TPR/S/14
Page 19
8. TheMinistry ofFinance oversees theDepartment ofCustoms andExcise andtheMonetary
Authority ofSingapore (MAS). TheDepartment ofCustoms andExcise administers thecollection
ofcustoms duties andGoods andServices Taxonimported goods. TheMAS regulates thefinancial
system; promotes, within thecontext ofthegeneral economic policy oftheGovernment, monetary
stability andcredit andexchange conditions conducive tothegrowth oftheeconomy; licenses and
supervises financial institutions; andperforms allfunctions ofacentral bank, except theissue of
currency.2
9. ThePublic Utilities Board isincharge ofsetting technical regulations relating toelectrical
safety products. TheMinistry oftheEnvironment setsregulations forfoodproducts, foodappliances,
andspecific hazardous chemicals andproducts. ThePrimary Production Department intheMinistry
ofNational Development setstechnical regulations andtrade control relating tofish,meat, fruitand
vegetables.
10. There isnoleadagency forservice-related policies. Suchpolicies arede-centralized andunder
thepurview ofthevarious Ministries andprofessional boards. TheMTIandtheTDB actasco-
ordinating agencies forservices matters under theGeneral Agreement onTrade inServices (GATS).
TheServices Development Division, established intheEDB, identifies newinvestment opportunities
intheservices sector andpromotes them through theEDB'sinternational network ofoffices.
2Monetary Authority ofSingapore Act1985, Article 4.WT/TPR/S/14
Page 20Trade Policy Review
(ii) Advisory andreview bodies
11. TheMTIhasfrequent contacts withbusiness leaders andprofessionals toobtain feedback on
issues ranging from theimpact ofGovernment economic policies toproblems encountered bytrade
inexport markets. TheMTIspearheaded theEconomic Planning Committee in1990toprovide fora
forgovernment officials andtheprivate sector toformulate andco-ordinate development plans and
strategies. TheMTIholds regular meetings withtheSingapore Federation ofChambers ofCommerce
andIndustry, including theSingapore International Chamber ofCommerce (SICC) asamember, and
theSingapore Manufacturers 'Association topromote dialogue between theGovernment andtheprivate
sector.
12. TheNational Wages Council (NWC), atripartite body comprising representatives from the
Government, employers andunions, provides fororderly wage adjustments inlinewithSingapore 's
long-term economic andsocial development. NWC recommendations areguidelines only. The
Consumers 'Association ofSingapore informs andeducates consumers ontheirrights andhowtoprotect
them.
13. Thecountry 'sgrowing regionalization efforts havealsopropelled theformation ofmoreprivate
sector-led business councils tospearhead bilateral business linkswiththecountries concerned.3The
International Advisory Council (IAC), comprising leading businessmen intheworld, wasformed in
1995toadvise theGovernment onthevarious economic strategies thatcould bepursued forthefuture
growth oftheSingapore economy.
14. There isnoindependent bodyinSingapore withamandate toreview andassess economic policy
issues onaregular, public basis.
(3) Trade Policy Objectives
(i) General trade policy objectives
15. Thegeneral economic philosophy ofsuccessive Singaporean Governments istoallow market
forces todetermine thebasic economic structure. Accordingly, thetrade policy approach remains
market oriented andoutward-looking. TheGovernment triestoensure thattradeis,asfaraspossible,
unfettered bytariffs andborder measures andthatcustoms andtrade documentation procedures are
streamlined tominimize inconvenience totraders.
16. Thestated objectives ofSingapore 'stradepolicies aretocontribute towards thestrengthening
ofafree,openandstable multilateral trading system; todevelop Singapore intoaninternational trading
centre; toidentify newmarkets while maintaining existing markets; tosafeguard anddiversify sources
ofimports; andtoincrease services exports. According totheauthorities, therehavebeennochanges
intheinstruments usedtoimplement tradepolicy objectives since1992, andtherearenosector-specific
policies inSingapore.
3Theseinclude:theGerman-SingaporeBusinessForum;thePhilippinesBusinessCouncil;theSingapore-British
Business Council; theFrance-Singapore Business Council; theSingapore-Australia Business Alliance Forum;
theThailand-Singapore Business Council; theIndia Business Group; theChina Business Group; theSingapore-
ShandongBusinessCouncil;theSingapore-HebeiWorkingGroup;andtheSingapore-SzechuanWorkingCommittee.Singapore WT/TPR/S/14
Page 21
(ii) Singapore andtheUruguay Round
17. Asasmall nation thatdepends heavily onafree,openandstable international trading system,
Singapore fullysupports theGATT/WTO toprotect itsinterests against anyunilateral protectionist
actions bytrading partners. Singapore participated intheUruguay Round toachieve theoverall aim
offurther liberalization ofglobal tradeandstrengthening ofrulesgoverning theconduct ofinternational
trade. Likemostparticipants inthenegotiations, Singapore 'smainobjectives intheUruguay Round
were: anincreased levelofmarket access; enhanced stability ofmarket access; improved transparency;
andamore efficient dispute settlement mechanism. Singapore regards aspositive theoverall results
oftheRound andtheestablishment oftheWorld Trade Organization.
18. Under Singapore 'sUruguay Round commitments, industrial tariffbindings willincrease from
0percentto65percentofalllinesandtheaverage bound rateforindustry, onatradeweighted basis,
willdecline from12.4percentto5.1percent.4Inservices, Singapore 'sschedule ofcommitments
asofend-September 1995covers 59activities and8major services sectors, including arevised schedule
onfinancial services.
19. Theauthorities estimate thatthefullimplementation oftheUruguay Round tariff reductions
bySingapore 'stopfiveexport markets, i.e.,theUnited States, Malaysia, theEuropean Union,
Hong Kong andJapan, which account forapproximately twothirds ofSingapore 'sexports, willresult
inaccumulated potential tariffsavings ofsomeUS$333 million forSingapore 'sexports tothesemarkets.
(4) Trade Laws andRegulations
20. Themain legislative measure pertaining toexport andimport transactions istheRegulation
ofImports andExports Actof1995, which provides theauthority tocontrol international trade in
prescribedgoods,asnecessary,byimposingexportorimportlicensingandothertrade-relatedmeasures.
TheCustoms Actgives authority totheMinister ofFinance todealwithalltariff-related measures
suchastheimposition oftariffs andcustoms valuation. TheEconomic Expansion Incentives (Relief
from Income Tax)Actof1994 andtheEconomic Expansion Incentives (Relief from Income Tax)
(Amendment) Actof1995cover investment allowances andincome taxrelief forproduction andexport.
Other trade-related lawscomplement these basic measures.
21. TheRegistry ofCompanies andBusinesses under theMinistry ofFinance isresponsible for
theadministration oftheCompanies ActandtheBusiness Registration Act. These Actsregulate the
setting upandoperation ofcompanies andbusinesses.5
22. TheMinistry ofTrade andIndustry submitted theUruguay Round Agreement totheCabinet
forratification. After approval bytheCabinet, itwasratified andSingapore became afounding member
oftheWTO on1January 1995. Singapore doesnothaveanydomestic legislation describing thelegal
status oftheWTO. Itisnotpossible forindividuals toinvoke WTO provisions before thenational
Courts.
23. TheUruguay Round agreements necessitated other changes inSingapore legislation. For
example, thePatents Actwasamended inNovember 1995tobring itintoconformity withtheAgreement
4GATT(1994), p.70andp.77.
5Liang andYng(1994), p.268.WT/TPR/S/14
Page 22Trade Policy Review
onTrade-Related Aspects ofIntellectual Property Rights (TRIPS). Other domestic lawsyettobe
amended ordrafted tofulfilSingapore 'sobligations under therespective Uruguay Round Agreements
willcover intellectual property andcustoms valuation. According totheauthorities, Singapore will
meetitsobligations within thetimeperiods stipulated inthevarious Agreements.
(5) Trade Agreements
(i) Multilateral agreements
24. Singapore wasamember ofGATT from August 1973. Singapore wasalsoasignatory to
theTokyo Round Agreements onTechnical Barriers toTrade, Government Procurement, Import
Licensing, andAnti-Dumping andheldobserver status intheAgreements onCustoms Valuation,
Subsidies andCountervailing Duties, andTrade inCivilAircraft.6Asafounding member oftheWTO,
Singapore hasassumed itscommitments under theMultilateral Trade Agreements. Singapore accords
m.f.n. treatment toboththeWTO andthenon-WTO members alike, except forpreferences inthe
ASEAN context. Singapore willhostthefirstWTO Ministerial Conference inDecember 1996.
25. Singapore isamember oftheAssociation ofNatural Rubber Producing Countries (ANRPC).7
Itwasamember oftheInternational Coffee Organization; however, Singapore didnotaccede tothe
revised International Coffee Organization in1995. Singapore isalsoamember ofsuchmultilateral
trade-related organizations asUNCTAD, theWorld Bank, theInternational Monetary Fund andthe
Asian Development Bank.
26. Singapore benefits fromGeneralized System ofPreferences (GSP) treatment mainly intheEU,
Japan andCanada. In1995, Singapore exported goods worth about US$4.5 billion under preferences
provided through theGSP, more thandouble thelevel of1990. Most ofthese exports wenttothe
European Union (Chapter IV(3)(xv)). Singapore isamember oftheGlobal System ofTrade Preferences
among Developing Countries (GSTP).
(ii) Bilateral agreements
27. Singapore hasbilateral tradeagreements withanumber ofcountries. TheTrade andInvestment
Framework Agreement (TIFA) between Singapore andtheUnited States underscores themutual desire
ofbothcountries totakesteps tofurther enhance andfacilitate theirbilateral trade relationship. The
TIFA established ajointTrade andInvestment Council ("theCouncil") asthemainbodyforconsultation
onbilateral issues.8Theobjectives oftheCouncil are:tomonitor trade andinvestment relations; to
holdconsultations onspecific trade andinvestment matters ofinterest, andtonegotiate agreements;
andtoidentify andwork towards theremoval ofimpediments totrade andinvestment flows andto
promote anexpansion ofthese flows.
6WTO document L/6453/Add.26, dated 27November 1995.
7GATT(1992),Vol. II,p.21.
8TheCouncil iscomposed ofgovernment representatives from bothcountries. Theprivate sector ofthe
respective countries areconsulted onmatters related tothework oftheCouncil andmayparticipate inthese
meetings.Singapore WT/TPR/S/14
Page 23
28. Since1992,SingaporehasratifiedInvestmentProtectionAgreementswithPolandandVietNam.
Singapore hasalsoratified comprehensive taxtreaties withPakistan, Poland, Vietnam andMexico
andlimited taxtreaties withSaudi Arabia (airtransport) andChile (shipping).
(iii) Preferential trade
29. Singapore 'sparticipation inregional economic agreements isbased ontheconcept of"open
regionalism". Through regional economic integration, Singapore seeks toovercome theconstraints
ofitssmall economy andbuild anexternal economy. According totheauthorities, tradeliberalization
attheregional levelisregarded asabuilding block towards multilateral trade liberalization.
30. Singapore isoneofthefounding members oftheAssociation ofSoutheast Asian Nations
(ASEAN), formed in1967.9InJanuary 1992 these countries agreed toestablish theASEAN Free
Trade Area (AFTA) topromote trade andinvestment intheregion. InJanuary 1993 theCommon
Effective Preferential Tariff (CEPT) emerged asthemechanism forimplementation. Member States
agreed totheeffective tariff reductions onproducts originating from ASEAN member States over
15years. Singapore offered 5,656 products attheHS9-digit level, or97percentofalltariff lines,
forinclusion inAFTA tariff reductions. Member States weretoeliminate allquarantine restrictions
andother non-tariff barriers, withrespect toproducts under theCEPT scheme, within fiveyears
beginning from 1January 1993.10
31. The1995 ASEAN Summit formalized newinitiatives thatwould accelerate thecompletion
ofAFTA to2003, instead of2008, andexpand ASEAN economic co-operation tothefields ofservices
andintellectualproperty.TheAFTAproductcoveragewasexpandedtoincludeunprocessedagricultural
products. Inaddition, allproducts intheTemporary Exclusion List(TEL) would betransferred to
theInclusion List(IL)infiveequal annual instalments of20percent, withthefirstinstalment in
January 1996 andending in2000.11
32. Theadoption oftheFramework Agreement onServices would initiate negotiations onspecific
commitments, tobecompleted within three years. According totheauthorities, signing theFramework
AgreementonIntellectualPropertynotonlystrengthensIntellectualPropertyadministrationandenhances
enforcement andprotection, italsocreates thepossibility ofsetting upanASEAN patent andtrademark
systems.
9Theother founding members were Indonesia, Malaysia, thePhilippines andThailand. Brunei Darussalam
joined asthesixth member in1984 andVietnam joined astheseventh inJuly1995. ASEAN hasseven dialogue
partners: Australia, Canada, theEuropean Union, Japan, theRepublic ofKorea, New Zealand andtheUnited
States .
10ASEAN Secretariat, (1995). SeeWTO (1995) formore details.
11TheTEL contains products exempted from theextension oftariff preferences under theCEPT scheme;
theILcurrently covers about 85percentofintra-ASEAN trade values.WT/TPR/S/14
Page 24Trade Policy Review
(iv) Regional co-operation
33. Launched in1989, AsiaPacific Economic Cooperation (APEC) wasdesigned toachieve free
andopentrade andinvestment intheAsia-Pacific region.12Since thisisconsistent withSingapore 's
objective ofliberal trade andinvestment régime, Singapore fullysupports thegoals ofAPEC andhas
beenoneofAPEC 'sactive participants.
34. TheBogor Declaration inNovember 1994committed APEC toimplement freeandopentrade
andinvestment intheregion, while affording flexibility tomember economies toimplement their
commitments totrade liberalization. IntheBogor Declaration, itwasagreed thatthepace of
implementation would takeintoaccount thediffering levelofeconomic development among APEC
economies, withtheindustrialized economies achieving thegoaloffreeandopentradeandinvestment
nolaterthantheyear2010 anddeveloping economies nolaterthantheyear2020.13TheBogor
Declaration articulated thethree main pillars ofwork within theAPEC fora:trade facilitation, trade
liberalization andeconomic andtechnical co-operation.
35. TheAPEC Osaka summit meeting inNovember 1995 resulted intheadoption ofanAction
Agenda which setouttheframework forfuture APEC activities aswellasproviding asetofprinciples
andspecific actions toimplement theBogor Declaration. TheOsaka meeting alsoresulted inthe
announcement ofspecific "down-payments" ofinitial actions containing measures thatfurther liberalize
andfacilitate foreign trade andinvestment. TheOsaka Initial Actions focused onsteps toharmonize
customs forms, adopt common product safety standards, deregulations, tariffreductions andeliminate
other specific trade impediments.14
36. Thedesire totakeadvantage oftheresource complementarity andgeographic proximity among
countries intheregion hasledtotheemergence ofagrowth triangle, linking Singapore withadjacent
areas ofMalaysia (Johor) andIndonesia (Riau). Theideabehind thegrowth triangle, proposed by
Singapore in1989, wasthatSingapore would benefit fromthereduced pressure onlandandlabour,
while Indonesia andMalaysia would gainfrom increased investment inflows from Singapore. In
December 1994Indonesia, Malaysia andSingapore signed aMemorandum ofUnderstanding (MOU)
toformalise theGrowth Triangle concept ofeconomic co-operation. SeeBoxII.1formore details.
12Themembers, besides Singapore, areAustralia, Brunei Darussalam, Canada, Chile, China, Chinese Taipei,
Hong Kong, Indonesia, Japan, theRepublic ofKorea, Malaysia, Mexico, New Zealand, Papua New Guinea,
thePhilippines, Thailand, andtheUnited States.
13WTO(1995a), p.24..
14APEC Economic Leaders 'Meeting (1995).Singapore WT/TPR/S/14
Page 25
BoxII.1: TheIndonesia-Malaysia-Singapore Growth Triangle
TheGrowth Triangle concept wasfirstmooted bySingapore in1989. Itwasintended tocapitalise onthe
geographical proximity andcomplementary strengths ofcontiguous sub-regions within ASEAN with a
view toincreasing cross-border trade andinvestment flows. Bybuilding onnatural sub-regional
synergies, itwasfeltthatthepace ofintra-ASEAN economic co-operation andintegration could be
accelerated anditsscope expanded significantly.
TheSijori (Singapore-Johor-Riau) Growth Triangle wasthefirstofitskindtobesetupin1989. Sijori
began asaninformal arrangement. Singapore andIndonesia signed abilateral economic co-operation
agreement in1990 tofacilitate joint collaboration inIndonesia 'sRiau Province. Malaysia supported the
Sijori concept, butdidnotenter atthattimeintoanyformal agreement withSingapore orIndonesia.
On17December 1994, thethree countries signed aMemorandum ofUnderstanding (MOU) toformalize
theco-operation framework between Singapore, Indonesia 'sRiau Province, theMalaysian State ofJohor
andanyother areawhich might bedesignated bytheParties. Indonesia hassince indicated thatitwould
liketoinclude itsprovince ofWest Sumatra. Sijori wasrenamed the"Indonesia-Malaysia-Singapore
Growth Triangle (IMS-GT)".
TheMOU provides aframework forbilateral andtrilateral co-operation inthedevelopment, expansion
andintegration ofvarious sectors including trade, transport andcommunications, tourism, shipping,
agriculture, forestry, industrial infrastructure andmanufacturing. Thethree countries alsoagreed to
encourage human resource development andtofacilitate andpromote theexpeditious andsmooth flowof
goods andservices, investments andpeople within theIMS-GT. However, theIMS-GT isprivate-sector
ledandmarket-driven andtherôles ofthethree countries aretosupport, encourage andfacilitate
bilateral andtrilateral private-sector collaboration efforts.
Singapore isthelargest investor inJohor. Between 1990 and1993, Singapore companies invested more
than US$555 million inJohor. Singapore isthelargest foreign investor intheRiau province, with
cumulative investments totalling almost US$1 billion.
Source: Government ofSingapore.