Transcript of PM's Speech at the USSFTA 10th Anniversary Reception at the US Chamber of Commerce in Washington DC on 24 June 2014

Distinguished guests, ladies and gentlemen. Thank you all very much for joining us this afternoon. In particular I would like to thank Ms Wendy Cutler for her very warm introduction and Mr Myron Brilliant who is our host here at the US Chamber of Commerce for this event. And also Mr Alex Feldman, who is President of the US-ASEAN Business Council. Thank you for co-hosting this event. May I also acknowledge the presence of Ambassador Charlene Barshefsky, who was present at the creation as US Trade Representative in 2000 and worked with then-US Ambassador to Singapore Steve Green to push for the launch of negotiations for the US-Singapore Free Trade Agreement (USSFTA). I am not sure if this is written in the book, but I believe she had something to do with teeing up the golf game which got it launched.

Origins of the USSFTA

The USSFTA began on a dark and stormy night, literally, because Bill Clinton and my predecessor Mr Goh Chok Tong had agreed to a round of midnight golf in Brunei, after dinner at the 2000 APEC Summit. The game was almost washed away by a thunderstorm. But the skies cleared and they did have a good game, which lasted until 3 o’clock in the morning. This was after the US elections; it was a lame-duck president and George W Bush had already been elected as the next President. Nevertheless, President Clinton agreed to start the FTA negotiations with Singa¬pore and the next Administration came in and continued the negotiations and carried them through to fruition. Under the Bush Administration, we negotiated a high-standard agreement. For example, Singapore granted Qualifying Full Bank (QFB) licenses to American banks, which enabled Citibank to expand in Singapore in particular, and it is something which we have not since offered to other FTA partners, although I may not be telling you a secret to say that several have asked. On the American side, America granted us duty-free access for all our exports to America from Singapore. And the USSFTA came into effect in 2004.

Benefits of the USSFTA

The FTA has promoted trade and investments between our two countries. The volume of trade has grown – whether it is consumer products like iPhones, whether it is Raoul shirts in Singapore, or Prima Taste spices, but also serious stuff – equipment like oil rigs, or oil drilling rigs, used in rescue operations after the Deepwater Horizon accident in the Gulf of Mexico in 2010. By 2012, total US investments in Singapore had exceeded the volume in any other Asia-Pacific country, including much bigger ones like Japan and Australia, while Singapore companies have supported about 40,000 jobs in the US. For example, Keppel AmFELS, which manufactures equipment for the offshore and marine industry, is currently one of the largest employers in South Texas with close to 2,500 workers and the CEO is here today.

But the USSFTA goes beyond economics in order to achieve strategic objectives. It has deepened America’s engagement in the region. As you heard, it was a precursor which led to other US FTAs, with Korea, Australia, and now negotiating the Trans-Pacific Partnership (TPP). It has enhanced America’s longstanding presence in the Asia-Pacific and has caused other regional countries to sit up and to take note, and to think how they too could deepen their relationship with the US. Because if Singapore decided to do it, presumably we must have concluded there was some sense in the purpose.

Beyond the USSFTA, our broader bilateral relations between Singapore and America have thrived. We have a Strategic Framework Agreement (SFA) between our two countries which anchors our security relations, and Singapore, for our part, we are happy to host American warships and airplanes. Now many more Singaporeans study and work in the US, and many more Americans are coming to Singapore to do the same, and long may this continue.

Trans-Pacific Partnership (TPP)

The USSFTA is not the only way Singa¬pore has fostered links between the two sides of the Pacific Ocean. Soon after concluding the USSFTA, Singapore entered into another FTA, with small partners this time – with Brunei, New Zealand and Chile, in order to form the P4 (Pacific 4) group. A small, high quality FTA which was designed to be a nucleus which could in time grow into something significant in the Asia-Pacific. And that has in fact happened, because the P4 has indeed become the starting point of the TPP which is now being negotiated between America and other Asia-Pacific partners. I say now being negotiated, but what we secretly hope is that it is now nearing completion of negotiations and I think there is a good chance of it happening this year.

The TPP will also be a high standard agreement, and will be a game-changer because economically it will integrate 40% of the world’s GDP, and one-third of the world’s trade. It is almost as large as the Transatlantic Trade and Investment Partnership (TTIP), which is a friendly arrangement across the Atlantic, between America and Europe, and it will be bigger than the North American Free Trade Agreement (NAFTA). So it will create 700,000 new jobs in the US by 2025, 10 times the number under the Korea-US FTA. All parties will benefit substantially under the TPP. There will be strong protection for Intellectual Property (IP) to support innovation and there will be rules to support e-commerce, which will benefit many technology companies, whether it is Google, eBay, IBM, HP or many other new ones and also benefit small businesses. There will be improved market access, which will mean cheaper products for consumers, and more export opportunities for producers.

Strategically too, the TPP is vital to the US’ international standing and engagement in the Asia-Pacific. The US is and will remain a Pacific Power and President Obama has committed himself and his Administration and the US I hope beyond his Administration to the “rebalance” to Asia. Singapore and many Asia-Pacific countries welcome this, because America’s presence in Asia has enabled regional countries to prosper and underpinned peace and stability throughout the region. But the rebalance is not just a matter of military presence. It must span a broad front – cultural exchanges, tourism links, people-to-people ties, and also economic cooperation. The strategic landscape in Asia is changing very rapidly. China is the top trading partner for many Asian countries, including many allies of the US. The Asian economies are integrating with one another, not only with China, but amongst themselves. For example, ASEAN is forming the ASEAN Economic Community which will be completed by the end of next year, and is negotiating the Regional Comprehensive Economic Partnership (RCEP) which is an FTA encompassing Japan, Korea, Australia, New Zealand and also India, plus the ASEAN countries. So for the US to engage in the region, and to expand its influence and relevance to Asian countries, trade policy has to be a key instrument. There has to be substance, if I may say, there has to be beef in the hamburger. The TPP is the most important deal on the table or anywhere on the horizon in this respect.

Negotiating the TPP is a complex undertaking because it goes well beyond the usual staple of reducing tariffs or even non-tariff barriers. The parties have to make some very difficult decisions, and consider how far and how fast they are willing to go in areas with major domestic and political ramifications. Therefore the negotiations have been very demanding and we in Singa¬pore alone have been privileged to have hosted three consecutive ministerial meetings since last December. Perhaps if we have to host another ministerial, we will organise a midnight golf game! But nevertheless we are almost there and I am encouraged by President Obama’s promise to constructively resolve the remaining issues and I think we should be able to conclude it this year.
Ratifying the TPP of course is a further step in getting it to become reality and is an exercise in itself. It is important that in the US the TPP has strong bipartisan and public support because what is at stake is not just the immediate gains to the US economy, but your long-term engagement in the Asia-Pacific, your commitment, your demonstration, that when you talk about rebalancing, when you talk about developing the ties, you are also bringing substance to the table and you are able to deepen the relationship in ways which go beyond words and speeches – to trade, to investments, to engagements, to interdependence and to a substantial and constructive presence of the US in the region. Therefore I hope that the Administration and the Congress will work together to obtain Trade Promotion Authority (TPA) for the Administration and for Congress eventually to ratify the TPP. I know the business community is very influential and Mr Brilliant was explaining to me that your building here was located here because your President a hundred years ago decided it was good to have business presence close to the White House, able to influence events. And I am sure the business community will lend your hand and your voices to support the TPP and its ratification.

Conclusion

The US has always promoted an open and inclusive rules-based framework for international cooperation. And that is what has made the US a great world power and one which is welcomed and accepted as a benevolent and constructive force in many parts of the world. It is also what motivated the US to sign an FTA with one small island nation 10 years ago. I hope it will also persuade the US to conclude and ratify the TPP, to reinforce its engagement in Asia-Pacific, and to consolidate your position as a Pacific power in the 21st century. Thank you very much.