SINGAPORE: Singapore, being a small country with little natural resources, has to embrace globalisation to thrive and inking free trade agreements (FTAs) is one method of doing so, said Health Minister Ong Ye Kung in Parliament on Tuesday (Jul 6). (Jul 6). Mr. Ong, a former trade negotiator, was making a ministerial address aimed at emphasizing the importance of trade agreements to Singapore and refuting “false claims” about the Singapore-India Comprehensive Economic Cooperation Agreement (CECA).
READ: Nothing under the CECA requires Singapore to accept PMEs from India on a conditional basis: Ong Ye Kung is a fictional character. Singapore now has 26 free trade agreements in place, including CECA, which has been criticized on social media and by the opposition once again. Because Singapore is too small to survive on its own, Mr Ong believes that tapping into global markets to make a living and become self-sufficient is critical to the country’s economic future. While the country lacks natural resources, it does have its geographic location, which is considered “one precious natural endowment.”
This allowed Singapore to capture trade flows between the Malacca Straits and Singapore, allowing Singapore-based port operator PSA to become the world’s largest container transhipment port. The port, which employs around 160,000 people, is critical to the expansion of the local maritime economy. It also aided Singapore’s development as a “aviation node,” with one of the world’s busiest airports and a 190,000-strong aviation-related industry prior to the epidemic. Singapore’s manufacturing and service sectors grew as a result of its excellent global connections. It is also becoming a technology, research, and development hub, with several global technology companies establishing regional or global innovation centers in Singapore. According to Mr Ong, there are around 50,000 foreign companies operating out of Singapore, with 750 of them establishing Singapore as their regional headquarters.
None of this would have been possible without a well-executed strategy, he noted.
“It was a lengthy and arduous process, but it was a necessary part of our island nation’s story. “Clean governance, rule of law, safety (where) you can stroll down the street at any time of day, political stability, solid infrastructure, high educational standards, and global openness,” he stated. “All of this, and more, has combined to make us a great destination to invest and generate jobs.” READ: Free Trade Agreements (FTAs) do not grant ‘unrestricted access’ to Singapore’s labor market; policies must benefit Singaporeans: Tan See Leng (Tan See Leng) THE IMPORTANCE OF GOING AFTER FTA SMr Ong stated that it is in Singapore’s best interests to pursue FTAs, a strategy that began in the late 1990s and has provided Singapore with benefits like as an early mover advantage and increased exports. For investors wishing to do business in Singapore, the country’s network of FTAs is also “a key selling feature,” he added. Furthermore, FTAs are “particularly significant” to small and medium-sized businesses because they allow them to break free from the limits of Singapore’s limited local market and get access to global markets. FTAs have encouraged local businesses to expand internationally, according to the minister, who noted that Singapore’s overseas investments have expanded nearly fivefold from S$200 billion in 2005 to more than S$930 billion in 2019. Meanwhile, the need under the FTAs for countries to eliminate or reduce tariffs on all trade between partners is “very beneficial to Singapore.” “Because, while other nations impose taxes on thousands of commodities, we are already quite open, imposing levies on only three alcoholic beverages: beer, stout, and samsu. As a result, any FTA that substantially reduces both parties’ tariffs is fundamentally favorable to Singapore,” Mr Ong explained. Governments must also protect foreign investments and ensure that regulations are applied fairly and equally to both domestic and foreign businesses under FTAs. They also establish intellectual property protection guidelines, which are a “essential assurance” for local businesses expanding internationally and developing their own products. Certain environmental and labor criteria are also established in newer FTAs. While not every government agrees with such restrictions, Singapore believes they “reflect current concerns about free trade,” according to Mr Ong. In its entirety: Ong Ye Kung responds to ‘false’ remarks about FTAs and the Singapore-India relationship. In Parliament, CECA Mr Ong specifically mentioned CECA, saying that the 2005 bilateral trade pact with India had benefited Singapore “in many ways.” It gave Singapore a significant first-mover advantage in India at a critical juncture in the country’s development as an economic powerhouse. It also lowered tariffs, making Singaporean goods more competitive in the Indian market. As a result, Singapore-India bilateral trade has increased by more than 80%, from S$20 billion in 2005 to S$38 billion in 2019. Similarly, Singapore’s direct investment in India increased by about 50 times during the same period, from S$1.3 billion to S$61 billion. As of 2019, 660 Singaporean companies have invested in India, nearly doubling the number from a decade previously. As these companies expanded geographically, they hired more locals, bringing the total number of locals to 97,000 in 2019. “If we accept the basic fact that Singapore needs the rest of the world to make a living,” Mr Ong added, “then we will see the fundamental relevance of all our FTAs.” They are an important part of the economic superstructure we have constructed. Without FTAs, we would not have been able to promote Singaporeans’ welfare to the extent that we have.” Given its recent drop to fifth place in an annual rating of the world’s most competitive economies, he noted, Singapore cannot take this for granted. Prior to this, Singapore had held the top spot in the Institute for Management Development’s annual ranking for two years (IMD). While Singapore continues to excel in areas such as government efficiency and economic competitiveness, it has lost ground in terms of global trade and talent, according to Mr Ong. “I hope this is only temporary as a result of COVID-19’s effects,” he added, adding that Singapore is still “holding its own” in terms of foreign investment overall. Despite the fact that 45 firms closed their regional or global headquarters in Singapore last year, more than 130 companies opened new ones, according to the minister. “When you attack FTAs, you are undermining the fundamentals of our existence, of how we earn a livelihood, of all the industries that FTAs support, and the hundreds of thousands of Singaporean employment created in these sectors,” Mr Ong added./n
