The free trade agreement signed between Singapore and the U.S. (USSFTA) in May 2003 came into force on Jan. 1, 2004, and provides opportunities and challenges for information and communications technology (ICT) suppliers in both countries, Singapore’s Ministry of Trade and Investment (MTI) said last week.
With enhanced investor protection, ease of entry and operation for investors and improved commitments in the services industries, the USSFTA will make it more attractive for U.S. companies to invest in Singapore, MTI said in a statement. Similarly, the USSFTA will make it easier for Singapore-based companies, including small and medium-sized enterprises, to invest in the U.S., the ministry said.
The agreement includes electronic commerce and ICT services, and details several provisions related to telecommunication services, including:
– service suppliers from both sides will have access to respective public telecommunications networks, with access guaranteed by the telecommunications regulators.
– safeguards will be put in place to protect against discriminatory and anticompetitive behaviour by incumbent suppliers in areas such interconnection, collocation and access to rights of way and resale.
U.S. carriers have a minor presence in Singapore’s telecommunications market, which is dominated by government-linked companies, and above all by the former monopoly carrier Singapore Telecommunications Ltd. (SingTel). By contrast, Singapore Technologies Telemedia Pte. Ltd. owns former U.S. carrier Global Crossing Holdings Ltd., which has recently emerged from Chapter 11 bankruptcy protection.
An element of the free trade agreement known as the Integrated Sourcing Initiative allows high technology goods from Singapore to enter the U.S. duty-free and will further reduce the administrative burden for such goods, MTI said.
As the first free trade agreement between the U.S. and an Asian country, the USSFTA will cement the already strong economic ties between Singapore and the U.S. and serve as a catalyst towards deeper U.S. economic engagement in the region, MTI said.
The USSFTA is the first such agreement signed by the U.S. with an Asian country, MTI said.