WORLD TRADE
ORGANIZATIONWT/TPR/M/67
11 May 2000
(00-1935)
Trade Policy Review Body
29 and 31 March 2000
TRADE POLICY REVIEW
SINGAPORE
Minutes of Meeting
Chairperson:  H.E. Dr. Iftekhar Ahmed Chowdhury (Bangladesh)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3II. OPENING STATEMENT BY THE REPRESENTATIVE OF SINGAPORE 4III. STATEMENT BY THE DISCUSSANT 8
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 10
V. REPLIES FROM THE REPRESENTATIVE OF SINGAPORE AND
ADDITIONAL COMMENTS 15
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 22ANNEX I ADVANCE WRITTEN QUESTIONS AND RESPONSES BY THE 25
DELEGATION OF SINGAPORE
ANNEX II FURTHER CLARIFICATION BY THE DELEGATION OF SINGAPORE 59WT/TPR/M/67
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The third Trade Policy Review of Singapore was held on 29 and 31 March 2000.  The
Chairperson, H.E. Dr. Iftekhar Ahmed Chowdhur y (Bangladesh), welcomed Mr. Khaw Boon Wan,
Permanent Secretary, Ministry of Trade and Industry, as head of the Singapore delegation,
H.E. Mr. Chak Mun See, and the delegation from Singapore and from the Singapore Mission in
Geneva.  He also introduced the discussant, H.E.  Mr. Roger Farrell (New Zealand) who would speak
in his personal capacity and not as a representative of his Government.  In accordance with the
established procedure, the discussant had made available in advance, an outline of the main issues heintended to raise.  These were contained in document WT/TPR/D/47.
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The report by the Government of Singapore was contained in
document WT/TPR/G/67, and that of the WTO Secr etariat in document WT/TPR/S/67.  Copies of
advance written questions submitted by Australia;  Canada;  the European Union;  Hong Kong, China;
Japan;  the Republic of Korea;  and the United States, had been transmitted to the delegation of
Singapore.  Replies to these and other questions raised during the meeting are reproduced at Annex I.WT/TPR/M/67
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF SINGAPORE
3. The representative of Singapore said that he had also had the honour of representing
Singapore at the last Trade Policy Review in June  1996, when the world, especially in his region, was
quite different.  Most parts of Asia had been booming, growing at more than 8% per year and the
arrival of the Pacific Century seemed assured.  However, Asian optimism evaporated in 1997 as the
financial crisis spread contagion and smothered the region with recession and pessimism, besides
retrenchment, hardship and, in some cases, riots and loss of lives.  At one stage, the contagion even
threatened the world with a global recession.  However, with the advent of Y2K, Asia staged a swiftand dramatic economic recovery.  The general mood in large parts of Asia was once again one of
confidence and optimism.  In fact, like the rest of the world, Asia was currently seized with the
'dot-com' fever.  Investors in many Asian stock exchanges had put the crisis behind them and were
now trying to figure out the difference between  China.com and Sina.com, between Yahoo.com and
Sohu.com and to decide whether the best way forward was to bet on all of them.
4. The Singapore economy was plugged into the global economy.  External demand accounted
for around 75% of total demand for Singapore's production with external trade around three timesSingapore's GDP.  Singapore's fortunes were therefore highly dependent on the health of others.  Over
the years Singapore had diversified its external market, spreading its major customers between
North America, Europe and Asia.  In many ways , Singapore was a microcosm of the global economy.
His presentation would cover the major developments since the last TPR of Singapore, highlighting
the Asian financial crisis and discussing how Singapore survived it;  the Internet revolution and itsimpact on the Singapore economy;  and, briefly, Singapore's economic strategies going forward and
how these would impact trade policies.
Asian financial crisis
5. Singapore was unable to insulate itself from the financial crisis as it was right in the centre of
the storm.  With 40% of the traditional export market in recession, the Singapore economy was hit,although with a time-lag.  From a growth rate of  7.5% in 1996, Singapore's GDP continued to grow
by 8.4% in 1997.  However, the 8.4% growth rate  masked the steady decline in economic activity
with the deceleration continuing into 1998.  For 1998, Singapore was lucky to escape negative
growth, although growth was only 0.4%, which by Singapore's standards was a recession.
6. However, the recession was brief with the economy staging a firm recovery in 1999 after two
consecutive quarters of decline.  In 1999, Singapore grew by 5.4%, for several reasons including
external factors such as the strength of the U.S. and European economies, the strong upswing in the
global electronics industry, and the recovery in Japan and other Asian economies.  Internally,
Singapore was able to improve its cost competitiveness significantly, by cutting costs rather than
weakening its currency.  The Government took the le ad in reducing tax liabilities through rebates and
some Government fees and charges, and by persuading employers and employees to exercise wage
restraint to reduce labour costs by 15%.  These cost cutting measures were implemented in 1998 and
made a critical contribution to Singapore's ability to seize export opportunities when external demand
rebounded.  As a result, Singapore was now firmly on the road to economic recovery with GDP for
2000 forecast at 4.5% to 6.5% but with a strong likelihood of achieving the upper end of the forecast.
Internet revolution
7. While the Asian financial crisis was wreaking havoc, the Internet revolution was quietly but
dramatically transforming the global economy.  No one had predicted that the decision in 1991 by the
United States National Science Foundation to privatize the Internet would have caused such a
fundamental reorganization in the way people live d, worked, learned and played.  Business modelsWT/TPR/M/67
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were being turned upside-down and the old econo my was scrambling to face competition from the
new economy.  Moreover, if there had still been hesitation about the Internet the AOL-Time Warner
merger had made it clear that there was no turning back.  The Internet revolution was accelerating thepace of globalization and rapidly blurring the line between tradeable and non-tradeable sectors and
between goods and services sectors.  As a result, the size of the globally contestable economy was
growing by leaps and bounds with local brick-and-mortar bookstores having to compete with
Amazon.com. and with many emerging Internet banks;  local stockbrokers had to compete against
e-trade.
8. The days when national borders and trade barriers could shield domestic industries from
foreign competition were numbered, and with the Internet even highly personalized services such as
education and healthcare could be offered to people located thousands of miles away.  "Natural
monopolies" in many services sectors, such as basic telecommunications and utilities, had suddenly
found themselves no longer protected.  In short, the Internet revolution was rendering protection
against global competition increasingly irrelevant and non-viable.  It was even having an effect on
WTO rules, which were formulated and negotiated at a time when life was simpler and nationalboundaries and border controls were clear.  The Internet had changed this landscape and in his
personal view WTO rules might have to be refreshed to take into account the Internet
Going forward
9. These issues had been considered by Singapore for some time.  Singapore had been lucky
over the last thirty plus years in transforming the economy from a small trading node into a modernbusiness hub, in the process creating well-paid jobs for Singaporeans and raising their standard of
living.  Singapore had based its economic development on two key principles:  strong adherence to a
free market economic system and active pursuit of outward-oriented economic policies.  The free
market had served Singapore well, enabling businessmen to be alert to market signals and to respond
accordingly;  it had also resulted in a more optimal allocation of resources.  Singapore's businesscommunity had always been outward looking, having little choice in this as the domestic market was
tiny.  Singapore's firms had to be internationally competitive to survive, although foreign investors
were welcomed with open arms since they brought with them not only capital but also technology,
management, and marketing skills.
10. A free market economy could not stop at national borders whereas an outward oriented
economy could not allow inefficiencies like cartels, price fixing, and tariff protection to persist in the
domestic economy.  He said that these key principles were consistently applied in Singapore's
economic policy-making.  The results were there for all to see:  since the last TPR, Singapore's
economy had grown by an average of 4.7% per year despite the set-back of the Asian financial crisis;
per capita GDP had increased to S$37,000 and inflation had remained low with consumer pricesrising by an average of 0.7% per year between 1996 and 1999, and were expected to rise by 1-2% in
2000 due to the fact that Singapore allowed imports to enter freely to satisfy consumer demand and
industrial needs.  Practically all imports, 99.96% of tariff lines, entered Singapore duty free.
11. In 1996 Singapore was the world's thirteenth largest exporter and importer although as a
result of the crisis this ranking dropped to fourteenth and fifteenth, in terms of exports and imports,
respectively.  With the economic recovery, total merchandise trade had returned to pre-crisis levels,
registering a growth rate of 8.1% in 1999.  Similarly, trade in services was affected by the crisis,although the recovery allowed services exports to grow by 27% in 1999, reversing the shrinkage of
29% in 1998.
12. However, although Singapore had done well in  terms of GDP, the Government was mindful
of the severe constraints facing the economy:  there were hardly any natural resources and, as a smallWT/TPR/M/67
Page 6
island nation slightly bigger than the size of Lake Geneva, Singapore faced absolute constraints in
land area and manpower.  Singapore did, however, try its best to overcome these constraints,
including enlarging the physical area by 13% since 1965 through land reclamation and by augmentingthe workforce with foreign manpower:  over 25% of Singapore's workforce were foreigners.
Singapore also invested heavily in education and training with 20% of the annual Government budget
being devoted to education:  the education profile of each annual cohort of young Singaporeans was
of first-world standard with 65% entering universities and polytechnics.  However, the older
generation was not as fortunate and as a result the total workforce was still of a third-world standardwith 40% not having secondary or higher education qualifications.
13. Singapore was pressing on with in-employment tr aining and retraining to ensure that older
workers had opportunities to upgrade their skills and hence their standard of living.  The task was
especially urgent given the rapid transformation of the old economy into the new economy.  Countries
that did not embrace the new economy risked being left behind, companies that did not embrace the
new economy risked marginalization, while workers who did not embrace the new economy risked
retrenchment and unemployment.
Post-crisis economic strategies
14. Despite a firm recovery from the Asian financial crisis, the representative believed that
Singaporeans realized that it was not 'business as usual' in the post-Asian-crisis world.  To thrive in
the new millennium and the new economy Singapore needed to sharpen its competitive edge further
and constantly reinvent itself.  Singapore was actively pursuing long-term economic strategies toaddress both the hardware and software aspects of its long-term competitiveness.  In hardware,
Singapore already had a competitive edge, having invested heavily in key economic and business
infrastructure.  International surveys had consistently ranked Singapore highly on infrastructure
including Singapore's sea and air ports, telecommunications facilities, and IT infrastructure.
15. On software, the key would be the quality of personnel, and training and education would
continue to be emphasized.  However, training Singapore's indigenous workforce alone would not be
enough since Singapore's small population would limit the talent pool.  Instead, Singapore needed to
augment both the quantity and quality of the workforce by actively attracting foreign talent.  Another
important aspect was the ability of the economy to leverage on science, technology and innovation to
keep pace with the global economy.  Singapore would continue to create a conducive environment togrow and develop a strong pool of entrepreneurs who could combine technology and business acumen
to succeed in the new economy.
Manufacturing and services
16. One of Singapore's key development strategies was to make manufacturing and services the
twin pillars of the economy.  Singapore already had a strong manufacturing sector, which had beenthe key locomotive of growth and would continue to enhance manufacturing capabilities and diversify
among and within existing key manufacturing clusters of electronics, chemicals and engineering.  At
the same time, Singapore would look into the de velopment of new high-growth emerging industries
such as the life sciences.
17. While the manufacturing sector was globally competitive, the same could not be said of the
services sector, one reason being that Singapore had been slow in opening up the services sector to
foreign competition.  The productivity of the services  sector had thus been significantly lower than in
manufacturing.  In the new economy, services would play an increasingly important role;  goods
would have an increasingly higher services content as more goods were bundled with services to form
an integrated product package.  In any case, the line between goods and services was blurring.  TheWT/TPR/M/67
Page 7
logistics industry, for example, had evolved from just providing transportation and warehousing to
delivering value-added services in supply chain management.  At the same time, technology was
rendering more services tradeable with the Internet accelerating this trend.  The implication was thatthe services sector in every country would increasingly be subjected to global rather than domestic or
regional competition.  Singapore had therefore decided to speed up the liberalization of its services
sector.
18. The Monetary Authority of Singapore had led the way in opening up financial services.
Singapore had embarked on regulatory reform in banking, fund management, and debt and equitymarkets to promote a more flexible and conducive environment for these financial activities to thrive
in.  Singapore was also allowing more foreign competition in the domestic banking sector and had
increased access for foreign banks:  the MAS had a nnounced, less than two week s earlier, the opening
up of the direct insurance industry and the lifting of the 49% foreign shareholding limit in locally
owned direct insurers.  The decision to open up the financial services sector was taken while
Singapore was still in the midst of the financial crisis.  In a crisis, many would have chosen
instinctively to close up;  however, Singapore decided that to delay the liberalization would haveunnecessarily delayed internal restructuring and went for the harder option of opening up even as the
Asian crisis was raging.
19. More recently, Singapore had taken another bold step forward.  Singapore had earlier adopted
the schedule of full market competition in telecommunications in April 2002.  However, in an Internet
era, two years was too long and Singapore decided to  bring forward the date by two years.  At the
same time, foreign equity limits for all public telecommunication services licenses were lifted.  In two
days, he added, Singapore would fully open the telecommunications sector.  The regulatory and
competition framework were being updated to be in line with the liberalization of market access and
the presence of full competition.
20. For electricity and gas, Singapore had, just three weeks ago, made a major announcement to
open up the contestable parts of the industry to full competition, including power generation and
supply, and gas importation and supply.  The current foreign equity ownership restrictions in these
sectors would be lifted completely although power and gas distribution and transmission were natural
monopolies and were expected to remain so, but would be tightly regulated.  Details were being
worked out and full liberalization could be expected in 15 months or so.
Conclusion
21. The representative said that his country had entered the new millennium on a cheerful note.
The global economic environment was favourable and Singapore's capacity to compete globally had
been enhanced.  However, more than anyone else, Singapore knew that sustained growth in the long
term, for a tiny city state without any natural resources, could never be taken for granted and neitherwould it come effortlessly.  The economic contest had become more intense with globalization, and as
countries worldwide enhanced their competitiv eness, the Singapore economy would need to be
responsive to these global developments and stay relevant and competitive.
22. Singapore had done reasonably well in the old economy based on the old virtues of hard
work, prudence, and rational policies.  As the world transited into the new economy in the new
millennium, Singapore would have to rely on the same virtues to succeed.WT/TPR/M/67
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III. STATEMENT BY THE DISCUSSANT
Economic environment
23. The discussant (H.E. Mr. Roger Farrell) said that he was struck by three statements made in
the Government Report:  the economic landscape in the region had changed;  in the aftermath of the
Asian crisis, many regional countries were restructuring their economies and would become more
formidable competitors;  and it could not be business as usual.  As an observer of Singapore for many
years, he was not convinced that it had ever approached its economic development on the basis of
"business as usual".
24. Singapore's response to the Asian crisis was of considerable interest, including cost-cutting
measures, labour flexibility, a flexible exchange rate, a prudent fiscal approach, and long-term
strategies in various sectors, such as indust ry, information technology and manpower.  He was
interested in learning whether, in retrospect, Singapore felt that there were any other steps that might
desirably have been taken at the height of the crisis.
25. During the current stage facing the "post-crisis landscape", he noted that there were some
elements of concern about competitiveness.  These included, first, concern about low value-addedmanufacturing, as reported in both the TPR reports;  second, concern about electricity tariffs being
less competitive than they should be, according to a Report by the Economic Development Board;
third, a report by the Ministry of Manpower, in March, of Singapore's labour productivity being below
that of many developed countries, and Singapore's regional neighbours' labour productivity growing
at a faster rate than that of Singapore;  finally, a report in the Wall Street Journal  of Singapore's
January export growth being a lot lower than pred icted, suggesting perhaps a more fragile recovery
than expected.  He pointed out that these were just random and not necessarily critical elements but
that it would be interesting to hear Singapore's assessment of its competitiveness.
26. From both the Secretariat and Government reports as well as other commentaries, it would
seem that the current thrust was to further innovate, liberalize and deregulate.  He was struck bycomments from the Singapore Government, such as "more space be given to the private sector",
"promote a creative entrepreneurial culture", "enhance Singapore's attraction to investors and foreign
talent", and "make Singapore more competitive in the new high technology global economy".
Trade and investment policy regime
27. As Singapore was recognized for its open trade regime and vigorous support for the
multilateral trading system, it was not easy to find fault with its performance in relation to both its
WTO commitments and its pursuit of trade liberalization.  However, some questions did arise.  First,
he noted that Singapore participated in a number of regional trade arrangements and was engaged in
bilateral FTA discussions.  Therefore, it would be interesting to learn from Singapore, a country as
committed and active in the multilateral trading system, how it regarded the interplay, both positiveand negative, between the various strands of trade policy – multilateral, regional, bilateral, and
unilateral.
28. Another question concerned Singapore's approach to tariff bindings.  The Secretariat's Report
had noted a large discrepancy between Singapore's applied and bound tariff rates and between its
practice in this respect (70.5% bound) and the overall pattern among developing countries.
Negotiating latitude had been cited as one explanation but he asked for a fuller explanation.  The other
important issue was the ban on imports of cars of three years and older and whether existing stringentinternal environmental and safety standards relating to vehicles made this import ban unnecessary.WT/TPR/M/67
Page 9
29. One of the most interesting underlying themes in Singapore's trade practices related to the
further lifting of the performance of its private se ctor internationally.  Although Singapore's private
sector already had a high reputation, he believed it would be interesting to pursue this further.  Thetwo reports contained information on the evolution of the Government's involvement in the domestic
industry, including through the government-linked companies, subsequently transferred to
Temasek Holdings.  Questions had been raised in this connection about access to preferential lending,
corporate governance, management appointments and guidance, and the impact on entrepreneurial
development.  It was also of interest that the Financial Times  recently reported that the Singapore
Government was considering faster reduction of its controlling stakes in large companies.  He asked
for details on the Government's policy and operational approach to direct or indirect involvement in
Singapore corporate operations.
Sectoral issues
30. The discussant stated that he would concentrate on electronics, financial services,
telecommunications, and the energy sector.  Electronics accounted for over half of Singapore's
merchandise exports and Singapore aimed to focus on high-value-added electronics.  It would beuseful to understand better the contribution of the Information Technology 21 strategy to the move
away from lower-value-added products and how Singap ore expected to maintain and lift its place in
the global electronics market.
31. Liberalization in financial services was already evident with the lifting of the 49% investment
limit in relation to banking, greater transparency in banking, the February Budget measures to attractmore foreign investment in the financial services sector, and the cut in domestic tax rebates in this
area.  Telecommunications were also being liberalized and with an April 2000 liberalization target
date, he asked about further progress while noting that this had been discussed in the Government's
presentation.  Noting that the power sector seemed to be highly challenging, he pointed to reports
saying that electricity deregulation was approached very cautiously initially;  that intervention by thePublic Utility Board in the market had been rather frequent;  and that disinvestment of Singapore
power was envisaged, with no foreign investor limits and with deregulation planned for 2001 or early
2002, which might allow for foreign ownership of generators and the private sale of imported
electricity to retailers.  While new information had been provided by the Government in its opening
statement, he asked whether Singapore could provide updated information of interest to Members onthe new electricity regime.
32. In the services sector in general, Singapore's reforms in the sector had advanced at a pace
ahead of its GATS Schedule and its stated aim was to become a global rather than a regional services
hub.  However, he wondered whether it would make sense for Singapore to extend its GATS
commitments to the five sectors not yet covered in its Schedule and whether it would bring benefits toSingapore in terms of the predictability and strength of its services regime.
33. He reiterated that it had not been easy to extract from the comprehensive Government and
Secretariat Reports anything like a catalogue of WTO commitment or compliance related issues.
While he had posed specific questions, it was clear that the Review rapidly drew one not so much into
cross-examination as into exploring the process of the creative and highly focused evolution of
Singapore's economic and trade policy.  He was sure that the Review would illustrate well the fact
that, in a Trade Policy Review, those who posed th e questions often had as much to gain as the
Member under scrutiny.WT/TPR/M/67
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IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
34. Members appreciated Singapore's strong support for trade liberalization in the rule-based
multilateral trading system and its active role in launching the next round of negotiations for furthertrade liberalization.  They welcomed Singapore's rapid recovery from the Asia financial crisis, and
praised its determination to maintain a sound macroeconomic environment and open trade and
investment regime at a time of hardship, and even to proceed with further liberalization in several
services sectors including banking, financial services and telecommunications.  Singapore's plans to
liberalize the insurance and energy sectors also gathered much enthusiasm among Members.Members acknowledged Singapore's implementation of  WTO-consistent legislation in the areas of
intellectual property rights and customs valuation before the given transition periods, and welcomed
its accession to the WTO Agreement on Government Procurement in 1997.
35. The representative of the European Union said that Singapore played a vital role in trade
between Asia and Europe with a large proportion of the goods going either way passing through
Singapore's port.  It was also an important trading partner by itself, and it was the EU's largest trading
partner among the ASEAN countries, accounting for 28% of total EU-ASEAN trade in 1998.  The EUhad been a net supplier of goods to Singapore for many years, although in 1998 the EU trade surplus
had shifted to a € 1.4 billion deficit in the wake of the financial crisis.
36. Generally, there were a relatively small number of concerns to the EU in the trade and
investment regime of Singapore.  However, the aspects on which the EU called for further efforts
were:  the high degree of government involvement in the economy through Temasek Holdings andgovernment-linked companies;  the absence of a ge nuine competition policy legislation;  insufficient
enforcement of intellectual property rights, especially CD and software copying and counterfeiting;
and the uncertainty of the tariff regime with only 70% of tariff lines bound and a wide gap between
the bound and applied rates.
37. The representative expressed regret that neither the Secretariat nor the Government Report
had mentioned the ASEM process to which the EU attached great importance.  It was in the context of
the ASEM dialogue that the trade pledge, adop ted in April 1998, had kept the EU's markets open
despite a considerable decline in its trade balance with Singapore following the financial crisis.  The
ASEM Summit had endorsed a Trade Facilitation Action Plan,  with a number of priority areas
including customs, standards, IPR, public procurement, SPS, and distribution.  The Summit had alsoendorsed the Investment Promotion Action Plan, agreei ng that improvements to investment policies of
partners would be made regularly within ASEM.  He was hopeful that Singapore would be able to
meet challenges, including the maintenance of competiveness of domestic manufacturing industries,
through the pursuit of the open and liberal policies.
38. The representative of Australia noted that his country had substantial commercial interests in
Singapore, with two-way merchandise trade reachin g $A 8.2 billion in 1999.  Singapore was also an
increasingly important trading partner in services, with over $A 1.3 billion services imported from
Australia each year.  Some minor access problems continued to impede some Australian exports, but
he hoped that the recent announcements of further liberalization in Singapore's services sectors would
help in reducing these problems.  The remaining barriers included restrictions on professional
services, in particular the recognition of some professional qualifications such as in legal services,
engineering, architecture and medicine, as well as strict rules on media ownership.
39. He appreciated Singapore's active role in promoting APEC Bogor goals and maintaining
forward momentum on both trade liberalization and facilitation.  Australia looked forward to working
closely with Singapore in a range of forums, including APEC, WTO, and possibly AFTA/CER FTA.WT/TPR/M/67
Page 11
40. The representative of Brunei Darussalam, speaking on behalf of ASEAN, noted that
Singapore, like other countries in the region, had weathered the financial crisis well, while
maintaining sound macroeconomic policies and its open trade and investment regime.  He welcomedSingapore's efforts to deepen its regulatory reforms in key services sectors, such as in the financial
services and telecommunications, with some of liberalization measures going beyond its GATS
commitments.  In the areas of intellectual property rights and customs valuation, Singapore had
brought its legislation into conformity with the WTO Agreements ahead of the transition periods.  He
said that Singapore's open trade and investment policies would benefit not only the Singaporeeconomy but other members of the multilateral trading system.
41. The representative of Hong Kong, China said that Singapore was a major trading partner of
Hong Kong, China, and that supposed rivalry between  the two countries was often referred to.  While
it was true that the two did emulate what was best in each others' economies, there was plenty of room
for at least two major financial and economic trading entities in the region and healthy competition
was to their mutual advantage.  On bilateral trad e, Singapore was Hong Kong, China's fifth largest
trading partner in 1999 while Hong Kong, China was Singapore's fourth largest trading partner in1998.  Interestingly, they traded in similar products and therefore competed in similar sectors:  both
countries in electronics, electrical machinery and appliances, while Singapore's also in petroleum the
same plus petroleum and related products.  The balance of trade had consistently been in Singapore's
favour, with Hong Kong, China having a deficit of US$3.5 billion in 1999.  Singapore was also
Hong Kong, China's sixth largest overseas investor in both the manufacturing and non-manufacturingsectors.
42. He commended recent unilateral liberalization initiatives, such as reform of a number of
services sectors and reducing government intervention in the market, and encouraged Singapore to
continue down this unilateral liberalization track.  The example of Singapore, already a very open
economy, showed that there was much to do in the WTO on further liberalization, particularly inservices, in the face of the challenges posed by an increasingly globalized economy.
43. The representative of Mexico stated that his country and Singapore enjoyed solid trade
relations and worked to further strengthen the relations through the WTO and APEC.  He commended
Singapore's excellent economic performance, in particular, its recovery after the Asian crisis.
Regarding the services sector, he wondered why Singapore had not made commitments in five out ofthe 12 GATS sectors and encouraged it to make commitments in the new Round.  He also stated that
it would be interesting to share Singapore's experiences with trade liberalization of certain measures,
and the responses to the Asian crisis.
44. He expressed concerns about Singapore's use of incentives to attract investment.  In his view,
any incentive would result in market distortions and he warned that the use of such incentives to try to
offset disadvantage might not be sustainable.  He wondered why Singapore, which had open trade and
investment regimes, had to resort to the use of incentives and how long it intended to use these
measures.
45. The representative of Canada noted his country's commitment to expand bilateral trade with
Singapore and the overall relationship had been underscored by the 1998 visit to Singapore of the
Canadian Prime Minister, as well as recent visits  by key Ministers.  Additionally, recent Canadian
trade missions to Singapore in the informati on and communications tech nology and biotechnology
sectors had been enthusiastically welcomed by the Singaporean business community.  The two
countries also cooperated and worked closely together in the regional and multilateral fora, advancing
common interests in further liberalizing trade and advancing an effective rules-based multilateral
trading system.WT/TPR/M/67
Page 12
46. He encouraged Singapore to accelerate the liberalization of its services sector, and hoped that
Singapore would liberalize its practices and procedures for the accreditation of foreign professionals,
which he believed would augment Singapore’s strengths as a world-class provider of professionalservices.  Canada was also “curious” about certain policies, including regulatory reform, regional and
bilateral trade relations, foreign investment regime, tariffs, government procurement, intellectual
property rights, competition and regulatory issues, and services.
47. The representative of Japan noted that in 1998 Japanese industries had invested around
US$1.1 billion in Singapore, and bilateral trade amounted to approximately US$24 billion.  While he
appreciated the open and liberal trade policy of Singapore, in particular, zero tariffs on most tariff
lines, he wondered why almost 30% of tariff lines remained unbound, including products of interest to
Japan, such as machinery and transport equipment, and requested Singapore to improve its bindings in
order to make its tariff regime more transparent and predictable.  Regarding services, Japan expected
fresh efforts by Singapore in making additional commitments in areas such as distribution and
environmental services.  In addition, he asked for further information on competition and regulatory
issues and the role of Temasek Holdings, especially in relation to the WTO Government ProcurementAgreement.
48. The representative of India stated that Singapore maintained one of the most liberal trade and
investment regimes in the world and that Indian exporters had not faced market access problems in
the recent past.  Bilateral economic relations were cemented in the 1994 Strategic Framework for
Economic Co-operation.  Singaporean investors had set up important joint ventures with Indiancompanies, in particular in chemicals, electrical equipment, fuels, hotels and tourism.  Singapore was
also one of India’s largest import sources and export destinations in the region, with India running a
sizeable trade deficit with Singapore, except for 1993-94.  He believed that initiatives undertaken by
Singapore in knowledge-based industries, in particular in value-added and professional services, and
in information and communications technology, would serve to reinforce the bilateral relations.
49. Singapore's binding of 70.5% of the tariff lines under the Uruguay Round contrasted with its
regional tariff initiatives undertaken under the ASEAN, its sectoral and accelerated tariff initiatives
under the APEC, and its recent free-trade discussion s with New Zealand, Japan, and Mexico.  He also
inquired about the rationale for applying excise duty even on products that were not produced
domestically, and applying quantitative restrictions on some imports, such as transport equipment,motor vehicles, etc., for environment, health or safety reasons.
50. With regard to non-automatic licensing of rice imports, he was happy to find that Singapore,
like India, was concerned about food security and tried to achieve this objective by stock-piling a
certain amount of rice.  He also noted that Singapore’s recourse to contingent trade remedies,
subsidies, etc., had been minimal and its standards and SPS measures followed international norms.He asked for further details on Singapore's sectoral approach to competition policy, and inquired
whether it would be necessary to adopt an umbrella approach in the future.  He requested more details
on the operation of tax concession schemes, under the Economic Expansion Incentives (Relief from
Income Tax) Act and the Income Tax Act, and their efficacy in promoting export-oriented production.
51. The representative of the Republic of Korea raised  some specific points of interest to Korea.
As other speakers, he pointed out the issue of tariff bindings, and asked whether Singapore would
consider increasing its tariff bindings from the current level and bringing bound rates more into linewith applied rates.  Regarding competition policy , he understood that there was a growing need for
such legislation in Singapore, because of growth in  the services sector or the alleged adverse impact
of government-linked corporations on the economy, and asked whether it intended to adopt such
legislation.WT/TPR/M/67
Page 13
52. Regarding Singapore's import ban on second-hand cars of three years and older on
environmental grounds and for traffic control reasons, given Singapore's already stringent measures to
control emissions and safety inspections, he wonder ed how the ban added to these measures in terms
of pollution and traffic control.  With reference to the construction industry, he asked Singapore to
review its regulations, in particular the requirements that for every five foreign construction workers,
one had to be Singaporean and that the employer had to pay government levies of S$470/month per
skilled worker, in addition to the already high wages.
53. The representative of the United States said that her country and Singapore enjoyed a strong
trade relationship based on comparable economic principles and strong ties in the information
technology sector.  The United States was Singapore's largest export market with around 20% of
Singapore's exports headed for the United States in 1998 at the height of the financial crisis.
Notwithstanding its small population, Singapore was the tenth largest market for U.S. exports, and
U.S. companies had accounted for 44% of total foreign direct investment in Singapore's
manufacturing sector in 1998.  Singapore had also been an important partner in the APEC process
where it played an active role in advancing APEC regional initiatives.
54. With respect to its trade policies, the United States commended Singapore's participation in
the ITA, Financial Services and Basic Telecommunications Services agreements and its advocacy for
the moratorium on customs duties for electronic commerce.  While these elements had built upon an
already liberal trade regime, Singapore could build greater predictability into its trade regime by
binding more of its tariff schedule and reducing the gaps between bound and applied rates, as well asby making market access commitments in services sectors.  She was pleased to learn about
Singapore's recent initiatives to further liberalize some services sectors, in particular, the elimination
of foreign ownership restrictions on banks and insurance companies, the decision to issue Qualifying
Full Bank (QFB) licences to up to six foreign banks by 2001, and the abolition of foreign investment
restrictions as of April 2000 in the telecommunications sector.
55. One area that required greater attention was the protection of intellectual property rights.
Despite the Government's efforts to enhance IPR protection and enforcement, retail-level piracy was a
serious problem and was particularly attributable to the commercial-scale availability of optical disk
products.  The United States looked forward to hearing more about Singapore's efforts in this regard.
Regarding labour, Singapore enjoyed a relatively good labour situation largely due to a strongeconomy and a sound educational system.  She ack nowledged Singapore's adoption of two ILO core
labour conventions.
56. The representative of Switzerland said that his country shared many of the points made by
other delegations and the Secretariat's Report, including the need to increase tariff bindings from the
current level of 70.5% of tariff lines and to bring bound rates more into line with applied rates in orderto enhance the predictability of its regime.  Other questions had been submitted in writing.
57. The representative of New Zealand commented on a few key elements of Singapore's trade
policy, which were highlighted in the review reports and the preceding discussion.  She noted that
Singapore was an active member in a number of regional trade groupings, including the ASEAN Free
Trade Area (AFTA) and APEC.  On any scale measuring the importance of international trade to a
local economy Singapore was in a class of its own:  merchandise trade represented around 226% of its
GDP.  New Zealand regarded itself as a significant trader but its equivalent figure was about 30%.Nevertheless, the two countries recognized the importance of market access in accordance with WTO
norms and had undertaken the drafting of a bilateral FTA with a comprehensive coverage of goods
and services.  She expressed interest in learning more about the way in which Singapore viewed the
relationship between its broader policy of regional integration and the multilateral trading system.WT/TPR/M/67
Page 14
58. The representative of the Czech Republic said that Singapore was an excellent example of a
country benefiting from significant economic growth having its roots in liberal trade and investment
regimes.  His country's economic relations with Singapore were healthy, promoted by a bilateral legalframework including an investment guarantee agreement and a double taxation treaty.  The
Czech Republic granted preferential access to exports from Singapore, hoping that it would help
Singaporean investors to increase their involvement in the country, and looked forward to bringing a
new impetus to the development of the relationship.
59. While noting that Singapore's track record regarding transparency was broadly positive, he
believed that more detailed information regardin g the extent of involvement of government-linked
corporations in the Singapore economy would streng then the case for further transparency.  He also
requested information on Singapore's intentions regarding further liberalization in sectors remaining
outside its scheduled commitments in the GATS, including distribution services, education services,
transportation services and others.
60. The representative of Norway believed that his country could subscribe to all the positive
remarks made about Singapore’s open and liberal trade and investment policies.  He also reported
strong satisfaction in the Norwegian business community about Singapore's trade and investment
policies:  some 114 Norwegian companies had chosen Singapore as a regional base for their Asian
operations.  Bilateral trade amounted to approximately Sw F 500 million, of which a substantial part
was shipping-related.
61. While Norway could only encourage Singapore to do more of the same and to continue its
efforts towards an even more liberal trade regime, there could be scope for further liberalization in the
services sectors.  Two issues that were particularly important were multilateral versus regional and
bilateral liberalization, and the discrepancy between bound and applied tariff rates.  In his view,
liberalization on a regional and bilateral level contributed to strengthening efforts towards multilateral
liberalization, and he was keen to listen to Singapore’s views on this relationship.  His second concernhad also been expressed by other delegations, and he looked forward to Singapore's response to this
concern.WT/TPR/M/67
Page 15
V. REPLIES FROM THE REPRESENTATIVE OF SINGAPORE AND ADDITIONAL
COMMENTS
62. The Chairperson invited the representative of Singapore to focus his responses on three
themes:  (i) economic environment;  (ii) trade policy by measure;  and (iii) sectoral trade policies.
(i) Economic environment
Asian financial crisis
63. The representative of Singapore, responding to the discussant's question whether on hindsight
Singapore would have done any differently in its response to the Asian financial crisis, stated that the
Asian crisis had been a great tragedy in terms of human suffering;  millions had been put out of work
and great fortunes had been lost.  Economic progress was pushed back by many years.  He
emphasized, however, that the correct lessons had to be learnt out of this experience in order to
prevent a repeat of this tragedy in the future.  One important lesson was that globalization was here to
stay.  While globalization brought huge opportunities it also carried plenty of risks;  those who were
not suitably prepared to ride the wave of globalization risked being overwhelmed by it.
64. The human desire to discover what lay beyond the oceans, to communicate, to exchange
experiences and to trade with the rest of the world had been inhibited by geography.  It was only in
the last few decades that technology had finally caught up to assist in the desire to globalize.  The
arrival of the new millennium had marked the threshold to a new era.
65. The rapid expansion in the number of Internet subscribers was evidence of a strong move
towards globalization, though the explosive growth of narrow band Internet in the last five yearsmarked only the beginning.  As Internet became broadband, so its contents would become even more
compelling and enriching.  Citing the previous day's Financial Times  report on Sweden’s plan to offer
every citizen a broadband Internet access, he said that Singapore was doing the same through its
Intelligent Island initiative, allowing audio/video contents from any corner of the world to penetrate
all homes.  There were only two options:  either to learn how to surf the wave of globalization or,through inaction, be overwhelmed by it.  It was ag ainst this backdrop that Singapore had decided in
the midst of the Asian crisis to push on with services liberalization.  It would consider going further,
but systematically in a controlled manner.
Multilateral, regional and bilateral trade arrangements
66. The representative reiterated that Singapore was fully committed to the WTO.  For a small
economy dependent on global trade, Singapore could not hope to succeed in the global economy
without the assurance of a rule-based multilateral trading system, which could ensure a fair and
predictable environment for all economies to engage in and benefit from trade.  Based on this belief,
Singapore tried to be an active and constructive player in the WTO, had hosted the first
WTO Ministerial Conference to signal its strong support for this institution, and had always been astrong supporter for further trade liberalization in the WTO.  Singapore was among the earliest
proponents for a new Round and was greatly disappoi nted that the proposed Seattle Round did not
materialize.  However, Singapore remained hopeful that a new Round would soon be launched and
would do all it could to help realize this objective.
67. However, Singapore did not see any contradiction in supporting both regional and multilateral
trade arrangements at the same time as it regarded RTAs and bilateral FTAs as complementary to the
WTO.  RTAs and bilateral FTAs could stimulate further global trade liberalization in the WTO, whenthey were suitably designed.  As RTA members and bilateral trade partners could more rapidlyWT/TPR/M/67
Page 16
achieve consensus building, they were likely to be prepared to be bolder in trade liberalization.  In
other words, RTAs could play a catalytic role in moving the WTO forward.  Singapore took this
approach in its membership of ASEAN, APEC and ASEM, and in its current negotiations withNew Zealand on a bilateral FTA.  Singapore and Ne w Zealand were both open economies;  therefore
there was no strong economic imperative for a bilateral FTA.  However, he hoped that it would help
accelerate free-trade liberalization within APEC, which would, in turn, help push the WTO forward in
global free trade.
68. Responding to the EU's inquiry on ASEM, he noted that Singapore was one of the founding
members and that indeed the idea of ASEM was first conceptualized by his Prime Minister, who had
seen the need for stronger economic linkages between Asia and Europe.  His delegation would work
diligently with the EU delegation to further accel erate economic integration between these two blocs.
With the ASEM Summit scheduled for later in 2000 in Seoul, it might be timely for ASEM to commit
to achieving free trade by, for example, 2020 or even earlier.
Trade and investments
69. Experience with investment incentives varied widely across countries.  Arguments on the pros
and cons of these incentives had never been and were unlikely to be conclusive.  Singapore used them
and found them effective in bringing about the economic development that it had enjoyed in the last
35 years.  Without the MNCs investing in Singapore and helping, in the process, to upgrade the
quality and skills of the workforce, Singapore would not be what it was today.  Singapore had had
cheap labour to attract MNCs earlier in its economic  history;  however, this was not sufficient reason
as MNCs could find even more and cheaper labour elsewhere.  As Singapore did not necessarily
provide a market for MNCs' products, tax incentives in the form of tax holidays were an important
factor in persuading many of these MNCs to invest in Singapore.
70. On the question of whether Singapore actually lost tax revenue by offering MNCs tax
holidays, Singapore had learnt early the arithmetical truth that X% of zero was zero.  In other words,
the so-called loss in tax revenue if the MNCs did not invest in Singapore to begin with was no loss.
But at the same time, he agreed with the representa tive of Mexico that investment incentives should
not be used perennially to support inherent disadvantages.  Therefore, he noted that Singapore's tax
holidays were time-limited, and that at the end of the pioneer status, the MNCs had to pay taxes like
any other Singapore-based corporation.
Role of Government in business
71. Government-linked companies were an important part of the Singapore economy and were
linked to its history.  Having started as a poor trading village, with only small traders who had no
special manufacturing skills, global marketing network or access to capital, Singapore's only
advantage was its excellent location.  In order to jump start industrialization, the Government had setup government-linked companies to form the nucleus for building up the industries.  These included
Singapore Airlines, shipping, banking, iron and steel, etc.  However, what distinguished his country's
government-linked companies from traditional state-owned enterprises elsewhere was that Singapore
had never subsidized, protected or micro-managed them.  The management of these companies had
always been independent and were judged and rewarded by their performance;  they had to stay
efficient and made decisions based purely on commercial grounds.
72. However, as the Singapore economy matured and as a larger base of local entrepreneurs and
management skills had evolved, the need for continuing government involvement in private
businesses had been reduced.  The Government had therefore decided to divest its shares in the
government-linked companies, including SIA, NOL, SingTel, which had become publicly listed onWT/TPR/M/67
Page 17
the Singapore Stock Exchange and whose management had to account to their shareholders.  The
Government remained a shareholder in these comp anies, with these shares forming part of the
Government’s reserves.
Competition policy
73. Competition policy was a complicated subject and there was no convergence of views among
economies that adopted different regimes.  Singapore had seen no need for competition laws and
relied purely on free competition to bring about a competitive market.  While this approach had
served Singapore well over the years, he agreed with the comments that as it privatized formerstate monopolies and allowed competition in the serv ices sectors, adequate competition laws would be
needed to ensure a level playing field.  While Singapore had no umbrella competition laws, it had
competition provisions within sectoral legislation to ensure competition in the respective sectors.
Singapore was seriously reviewing whether this sectoral approach to competition policies was
adequate, and it was possible that by the time of the next TPR Singapore might have evolved a more
definite competition policy regime.  Meanwhile, Singapore would welcome suggestions, views and
advice from all Members with relevant experience in this field.
74. The discussant noted that Singapore's response to the Asian financial crisis, which was further
liberalization of its services sectors, seemed to be reflective of the new economy, rather than the old
economy.  On the issue of multilateralism versus regionalism and bilateralism, he was encouraged to
hear that the multilateralism was the foundation of Singapore's trade policy and that its regional and
bilateral initiatives were fully complementary to the WTO and served to push global tradeliberalization.  Regarding government involvement in the private sector development, he was
interested in observing how this would evolve by the time of next TPR, as the need for such
involvement was said to be reduced.
75. The representative of Japan sought further information regarding Temasek Holdings whereby
Government provided strategic guidance and played a role in appointing the board of management.  In
addition, he asked Singapore's view on how it intended to promote and ensure competition in sectors
where government-linked companies, such as SingTel, had dominant positions.
76. In responding to Japan's questions, the representative of Singapore stated that
Temasek Holdings was wholly owned by the Minist ry of Finance (Inc.) and the government-linked
companies were either wholly or partially owne d by Temasek Holdings.  Like other commercial
entities, Temasek and its GLCs had independent boards of directors and management and its objective
was to maximize its shareholders' values.  Moreover, the choice of CEOs and the board of directors
was also based on commercial considerations.  Regarding government-linked companies that enjoyed
monopoly or dominant positions in their respective se ctors, he reiterated the Government's intention
to progressively privatize them by selling govern ment shares and/or liberalizing the industries and
subjecting the incumbents to competition.  For instance, Singapore's telecommunications sector was
going to face full competition by the following day,  and its energy sector within 15 months.  Whether
they would be able to retain their market shares in the new environment was yet to be seen.
(ii) Trade policy by measure
Tariff bindings and GATS commitments
77. The representative of Singapore stated that it was certainly prepared to consider new
commitments under the GATT and GATS, once the new Round was launched and included industrial
tariffs in its scope.  Singapore would narrow the gap in its bound and applied tariffs, increase the level
of tariff bindings and make more commitments in GATS as long as other Members did the same.WT/TPR/M/67
Page 18
Import ban on old motor vehicles
78. The representative reminded Members that Singapore did not have a domestic automobile
industry and imported all its motor vehicles.  Therefore, the import ban on old motor vehicles wasnon-discriminatory.  The ban existed in Singapore in order to promote free-flowing traffic as well as
the environment.  Singapore also imposed population control on cars, which limited the growth rate to
a certain percentage every year.  Tenders to obtain a certificate of entitlement (COE), which allowed
the purchase or import of a car, were conducted monthly, and the present COE price was about
S$45,000 or about US$20,000.  The COE was limited to ten years;  to use the cars beyond ten years, apremium had to be paid to extend the life of the COE.  This policy discouraged the use of old cars on
the roads.  Singapore also imposed a tax surcharge on older cars, while providing vehicle tax rebates
to owners who scrapped their cars early.
79. The import ban on old vehicles was an additional measure to discourage further old cars on
the roads.  Singapore had limited land;  a significant portion was already taken up by roads and it
could not provide more for roads.  Given the limited number of traffic lanes, Singapore tried to
minimize car breakdowns by discouraging old cars on the road;  repair statistics showed that carmorbidity increased after three years of usage.
Protection of intellectual property
80. Knowledge or intellectual capital would be the key factor of competition in the new
millennium while, with increasing commoditization, returns on the traditional factors of production,
like land, capital, labour were facing diminishing returns.  A strong IP protection regime wastherefore increasingly becoming an important economic infrastructure in the new knowledge-based
economy.  Singapore had taken a serious approach to IP protection.  It had made special efforts to
eliminate illegal optical disk manufacturers, which industries had complained about, although the
problem of retail piracy continued to exist in Singapore as in all economies.  In relative terms,
Singapore had not done too badly in IP protection, as confirmed by independent and reputable surveys
conducted by the Political and Economic Risk Consultancy (PERC) and the International Institute of
Management Development, which had ranked Singa pore as having the best IPR protection regime in
Asia.  Nonetheless, Singapore acknowledged the need to enhance the IPR regime, especially its
enforcement efforts, to tackle new trends such as internet-based piracy.
81. One effective way to eliminate retail piracy was through mass public education to raise
awareness and to inculcate in consumers a natural respect for intellectual property.  Companies too
had to devise creative strategies to reduce the risk of having their IP pirated, and new business models
to combat piracy.  As the world of the Internet arrived, old assumptions and old paradigms were being
replaced by new innovations and the scope for new thinking became immense.
82. The discussant expressed his understanding on Singapore's reciprocity-based approach in
making further GATT and GATS commitments.  However, he encouraged Singapore to rigorously
proceed with its liberalization unilaterally.  He felt reassured by Singapore's strong commitments to
IPR protection.
83. Responding to the discussant, the representative of Singapore stated that Singapore was
prepared to make further commitments in the next Round.WT/TPR/M/67
Page 19
(iii) Sectoral trade policies
Manufacturing
84. The representative of Singapore stated that manufacturing had been a major engine of growth
in the last 35 years and would remain so in the future, even as his country promoted the services
sector.  Singapore’s manufacturing sector was dive rsified and included electronics, chemicals and
engineering;  electronics accounting for nearly half of the manufacturing value-added.  Responding to
the concerns expressed by some Members regarding the over-dependency on electronics, he noted
that electronics was a large industry, comprising many different industry segments.  However, thedevelopment of the other segments, such as chemi cals and life sciences, was actively being promoted
to enhance diversity.  In particular, life sciences was believed to have potential to become even larger
than the IT industry.  As the entire human genome would be mapped this year, he noted that
Singapore was well-placed for Asian genomics research because of its ethnic diversity, excellent
healthcare infrastructure, as well as its capabilities in IT and biomedical engineering.  To move ahead,
Singapore would have to strengthen further its research capabilities, integrate better the work done in
its research institutes and hospitals, and promote investment and entrepreneurship across the entiresector.
85. Regarding the fate of Singapore’s low-end manufacturing activities, this was in the hands of
the market:  as costs went up, low value-added manufacturing activities would find it difficult to
remain viable and would be replaced by high-end manufacturing activities.  Singapore’s
manufacturing sector today was vastly different in nature to that of ten years ago and 30 years ago.With industrialization, Singapore’s manufacturing sector had been upgraded from the makers of
matches and joss sticks, to assemblers of TVs and radios, then to the world’s largest producer of hard
disk drives, and in recent years, to producers of semiconductors and wafers.  He hoped that by 2020
life sciences would be successfully established as a strong pillar.
Financial services86. Delegations had encouraged Singapore to liberalize further the financial services sector;
however, this was different from other sectors, like telecommunications or manufacturing.  As the
Asian financial crisis had amply demonstrated, problems in this sector could have fatal effects on the
rest of the economy.  Singapore therefore believed in being cautious.  It was not making a big bang,
but more like a continuous series of small bangs, which collectively, however, should add up to be abig bang.  This pragmatic approach had been commended both by local and foreign industry players;
however, the sector was expected to be further re-engineered by the time of the next TPR.
Professional services
87. The perennial concern of many countries in liberalizing professional services was the fear that
the quality of such services might be inadvertently undermined.  Liberalization in this sector wastherefore quite complex.  While proceeding slowly, in education services Singapore had welcomed
foreign players like Johns Hopkins, MIT, Chicago Management School and INSEAD, and even
Chinese universities.  Legal services were being opened up, and even the medical services were being
pried open.  Once these services sectors were opened up, every player would be forced to benchmark
internationally;  when the competition became more ferocious, Singapore would measure up to it.WT/TPR/M/67
Page 20
Liberalization of the telecommunications sector
88. From 1 April the Singapore telecommunications sector would be fully open to new players.
In this regard, Singapore had just issued five new facilities-based licences and 24 service-basedindividual licences to successful applicants, including MCI WorldCom, AT&T and FLAG Telecom.
89. The discussant commended Singapore because despite strong pressure in the recent past,
Singapore had not reverted to any protectionist measures and had taken steps to liberalize a number of
services sectors.  He also welcomed its move in the power sector.
90. The chairman sought further information on Singapore's two types of rice licences.
91. The representative of New Zealand requested further information regarding Singapore's
approach on the development of life sciences, in particular, whether it intended to take a
market-driven or other strategic approach.
92. The representative of Japan expressed his appreciation for Singapore's intention to open up its
financial services sector.  He wondered, however, whether it expected to allow more entries of new
banks in the sector;  it had been reported that no banking licences had been issued since 1973.
Regarding telecom liberalization, he hoped that a free competitive market would emerge in the sector.
93. The representative of the European Union commended Singapore's liberalization in the
insurance sector through the removal of the 49% foreign ownership restriction in March 2000, and
wondered whether it intended to bind its liberalization measures in the GATS schedule.  She further
inquired about the timeframe regarding Singapore's intention to remove the 49% restriction on the
existing locally owned direct insurance companies.   With regard to telecommunications, she sought
information on the divestment process of SingTel.
94. The representative of Singapore responded to the five major areas raised by the discussant
and Members.  Regarding the power sector, he said  that all contestable segments would be open to
full competition within 15 months, while uncontestable segments, such as the grid, would remain a
monopoly but be tightly regulated.  The contestable segments included four or five currentlystate-owned power generation and retail companies as well as gas supply at the retail level, which
would be opened for international tenders.  He also noted that liberalization would proceed
simultaneously in the gas and electricity sectors.  The corporate mission of the power sector was that
within fifteen months Singapore should enjoy the most competitive utility rates possible.
95. Regarding the life-science sector, he believed that all decisions had to be market-based,
however, Government played a crucial role in a small country like Singapore whose physical size and
population were small.  As life sciences required  expert knowledge, Singapore would welcome any
global talent willing to make a contribution to the sector.
96. Responding to Japan's question on banking, he said that Singapore was opening up the sector
and had already issued new banking licences this year.  On the issue of Singapore's intention to bindits liberalization in insurance, raised by the EU, he referred to his previous comments on Singapore's
GATS commitments.
97. He noted that regarding the divestment process of SingTel, the company was very large with
the largest capitalization on the Singapore Stock Exchange.  The government had been selling off its
shares little by little, but remained as the largest shareholder.  He believed that within five years or
less the picture would look quite different given the deregulation process that was currently being
undertaken in the sector.  Moreover, given the global trend to form worldwide networks throughWT/TPR/M/67
Page 21
alliances, he believed that the divestment of SingTel would eventually result not in the private-public
direction but in increased foreign ownership and participation in a global network.  This was the basis
of a merger between Singapore and Virgin Airlines, which had formed a global air network.
98. Regarding rice licences, replies would be provided later in writing.WT/TPR/M/67
Page 22
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
99. The Trade Policy Review of Singapore, which generated enormous enthusiasm among the
Member countries, was most useful to all participants in a variety of ways.  To the Singaporedelegation, so ably led by Permanent Secretary Kh aw Boon Wan, it provided a helpful assessment of
how their trade and investment policies are perceive d by us;  to all others it demonstrated how sound
macroeconomic fundamentals, wise socio economic management, continued liberalization and bold
regulatory reforms helped sustain growth for a couple of years after the last Review and thereafter
assisted recovery in the aftermath of the economic crisis that hit the Asian region in 1997.  The size ofSingapore has come up;  we all know that Singapor e in low tide is larger than at high tide but
Singapore has shown that small can be beautiful.
100. It was acknowledged by several that the example of Singapore merited emulation.  Many
others saw lessons to learn.  Particularly noted was Singapore's swift and flexible response to the
crisis, without taking protectionist measures, at the same time accelerating liberalization in key
services as financial and telecommunications, as also planning the same in the energy sector.  They
observed that Singapore was one of the most open economies in the world with zero tariffs for mostlines, a liberal foreign investment regime and on-going reform programmes in the services sector
which went beyond its GATS commitments.  Singapore's steadfast faith in the multilateral trading
system was appreciated, as was its prompt implem entation of WTO Agreements including those for
which it has a transition period.  Members also noted Singapore's active involvement in regional
arrangements under a policy of open regionalism.
101. Some concerns were expressed.  One was over an apparent decline, or threat thereof, in
Singapore's external competitiveness in certain activities.  Suggestions were made that efforts to
encourage innovation as well as further liberalization and deregulation should be continued.  Some
Members also queried why Singapore had left almost 30% of its tariff lines unbound, and asked why
it maintained a sizeable gap between bound and applied rates;  this tended to lend a degree ofunpredictability and uncertainty to its tariff regime.  Details were sought on bilateral trade agreements
currently under negotiations with Japan, Mexico and New Zealand, and their status in terms of
notifications to the WTO.
102. Furthermore, Members asked for details in a number of more specific areas including:
- the relationship between Singapore's multilateral liberalization commitments and
regional and bilateral agreements;  in particular, the rationale of negotiating bilateral
preferential agreements given that Singapore was already a substantially open market
economy;
- the reason for imposing tariffs as well as excise duties on certain alcoholic products;
- the ban maintained on imports of cars of three years and older for environmental
reasons, given the already stringent environmental compliance standards imposed by
Singapore on all cars;
- the rationale for providing investment incentives;
- harmonization of standards and details on new guidelines being developed on the
labelling of genetically modified organisms;
- the consistency of the Major Exporter's Scheme (MES) with the WTO Agreement on
TRIMs;WT/TPR/M/67
Page 23
- enforcement of intellectual property rights, particularly at the retail level and the
success of self-policing of alleged infringements of intellectual property rights;
- the role of Government in the economy, in particular through the holding company
Temasek and the Government linked corporations;
- intentions to develop an economy wide competition policy;
- transparency in government procurement and the 2.5% preference granted for
ASEAN members;
- the possibility of increasing Singapore's services commitments under the GATS and
scheduling services not already included in Singapore's GATS schedule;  and
- market access in some services, including professional services.
103. Members greatly appreciated the clarification and responses provided by the Singapore
delegation.
104. Singapore's impressive results, flowing from its prudent policies, are self evident.  Its stated
desire to be the hub of some identified economic activities, both regionally and globally, is being
supported by a variety of well-designed efforts.
105. Singapore's continued commitment to trade liberalization and the multilateral trading system
is to be applauded.  In conclusion I cannot help but observe that what another City State, Athens was
long ago to the Age of Pericles, Singapore has become, in contemporary times, to the Age of
dot Com.WT/TPR/M/67
Page 25
ANNEX I
ADVANCE WRITTEN QUESTIONS AND RESPONSES BY
THE DELEGATION OF SINGAPORE
AUSTRALIA
Secretariat Report (WT/TPR/S/67)
GATS Commitments
As the Secretariat report mentions, under the GATS, Singapore made commitments in 7 of the
12 sectors;  commitments were not made in distri bution services, education services, environmental
services, health related and social services, and other services.  In addition, only partial,
commitments were made in some sectors, notably transport (where commitments were made only in
maritime transport), while no commitments were made in certain professional services, such as legal
services.  Since the previous review, Singapore has signed the fourth protocol on basic
telecommunications services.  Singapore is to be commended for the liberalization it has already
undertaken in these areas.  There is scope for further liberalization of market access and nationaltreatment in key sectors, including the telecoms, financial and professional services sectors.  We
would like to know whether Singapore intends to go further and make commitments in any of the other
five sectors?
During the Uruguay Round services negotiations, Singapore took into consideration all
requests made.  We did not make commitments in education services, environmental services,distribution services and social services, as these were not requested of Singapore then.
Our key development strategy is to make manufacturing and services the twin pillars of our
economy.  To make our services sectors globally competitive, we are aware that the way forward is to
deregulate these sectors.  We have deregulated the telecommunications, financial and energy sectors.
The deregulation of other services sectors will be reviewed accordingly.
We are prepared to consider new commitments under the current round of services
negotiations.  It would depend on whether other WTO members are prepared to do likewise.
Professional Services
We note the Secretariat's comment (p. 94) that the competitiveness of a number of services is likely to
improve as they are opened up to competition, both domestic and foreign.  We also note that
Singapore has undertaken a review of the legal services area and that legislation was passed in
January 2000 to permit foreign law firms to form joint ventures with Singapore law firms and to
permit foreign lawyers, under certain conditions, to offer advice on Singapore law.
With the actual and potential benefits of enhanced services competition in mind, we seek Singapore's
advice on the following matters:
- What are the bases on which Singapore will allow the entry of foreign law firms into
joint ventures with Singapore law firms?
- Will Singapore give consideration to bringing forward the review of the number of joint
ventures from the planned five years if the benefits and demand for such ventures exceed
current expectations?WT/TPR/M/67
Page 26
- Following the review of legal services and passage of legislation in this area is
Singapore planning reviews in other service sectors?
- Does Singapore intend to make binding commitments on legal services and remove its
MFN exemption?
The recent amendments to our legislation – Legal Profession (Amendment) Act (No. 4 of
2000) – permitting the establishment of joint ventures between Singapore law firms and foreign law
firms are now publicly available as they have been passed by Parliament.
Interested Members can approach the Singapore Mission in Geneva for a copy of the basis on
which Singapore would allow foreign law firms into joint ventures with Singapore.
Joint ventures are a new development in the supply of legal services in Singapore.  This full
impact on Singapore's competitiveness as a financial centre and their efficacy as a mode of upgrading
the legal software of Singapore lawyers can only be evaluated over a period of three to seven years.
This is the reason why provision has been made for five joint ventures.  There is no immediate plan to
further liberalize our legal service sector.  Nonetheless, we are prepared to consider bringing forward
the review of the number of joint ventures from the planned five years if the benefit and demand forsuch ventures exceed current expectations.
Singapore is prepared to consider undertaking commitments in relation to foreign offshore
lawyers and translating the currently proposed libera lization in the legal service sector into binding
commitments under the GATS in the context of services negotiations in the WTO.
We appreciate that there is a need to further deregulate our services sector.  In this regard, we
have deregulated the telecommunications, financial and energy sectors.  Other services sectors will be
reviewed in due course.
CANADA
Secretariat Report (WT/TPR/S/67)
Chapter I(4)(ii), para. 22
The footnote states that foreign workers are subject to monthly levies which range from S$100 for
employees classified as skilled to between S$330 and S$470 for unskilled workers, depending on their
activity.  In addition, companies are subject to "d ependency ceilings" restricting foreign employees to
a certain percentage of their total workforce.  Can the Government of Singapore clarify whether these
levies and dependency ceilings are applied to workers (e.g. service providers) entering the market ona temporary basis or if they are only applied to workers permanently entering the work force?
The levies and dependency ceilings are some of the control mechanisms put in place to ensure
that the number of unskilled and semi-skilled foreign workers is regulated.  The aim of the controls is
to minimize social, economic and political costs arising from the presence of a large foreign
workforce in Singapore.  Hence, any company which is hiring unskilled and semi-skilled foreignworkers whether on a part-time or full-time basis, will be subjected to the control mechanisms, such
as the foreign worker levy and the dependency ceiling.
On the other hand, highly skilled workers (i.e. technical specialists etc) and professionals are
not subject to such control mechanisms regardless of whether they enter Singapore to work on aWT/TPR/M/67
Page 27
part-time or full-time basis.  This is to encourag e recruitment of higher skilled foreign manpower and
foreign professionals.
Chapter II(4)(ii)(a), paras. 31 and 33
We note that Singapore is a signatory to the ASEAN Framework Agreement on Services (AFAS).  Has
the WTO Committee on Regional Trade Agreements (CRTA) been notified?  What is the proposed
timetable for liberalization of the services sectors covered by this agreement?
The AFAS has not been notified to the CRTA.  AFAS is still a work-in-progress as sectoral
market access negotiations are ongoing.  What was agreed in 1995 by ASEAN member countries was
basically a framework of disciplines governing services.
The proposed timetable for liberalization of services sector covered by AFAS is 2020.
According to the report, Singapore is a signat ory to the ASEAN Framew ork Agreement on Mutual
Recognition Agreements (MRAs).  Have any MRAs affecting trade in services been signed since the
Framework Agreement came into force?  If so, has the Council for Trade in Services (CTS) been
notified?
No MRAs affecting trade in services have been signed.
Chapter II(4)(ii)(b), Box II.1, para. on Services
According to the report, ASEAN members agreed to launch a new Round of negotiations, beginning in
1999 and scheduled to end in 2001, to discuss services outside the current seven priority services and
to include all services sectors and all modes of supply.  What progress has been made towards
reaching this objective?  Have the commitments on a ll seven priority sectors been fully implemented?
ASEAN has agreed to a phased approach for liberalization as follows:  In the short-term
(1999-2001), the coverage will be on the seven priority sectors and also sectors/subsectors committed
under GATS.  ASEAN has also committed itself to a long-tem (2002-2020) services liberalization
goal i.e. to achieve free flow by the year 2020 of all services sectors and all modes of supply.
Chapter II(4)(ii)(d), para. 40
The report states that since 1996, Singapore has not signed any bilateral free-trade agreements,
although one is currently being negotiated with New Zealand.  The footnote states that the agreement
aims to liberalize trade in most services by December 2000.  Can the Government of Singapore
clarify which services are covered by this agreement?
Singapore sees RTAs and FTAs as complementary to the WTO.  Suitably designed, RTAs
and FTAs can stimulate further global trade liberalization in the WTO.  Consensus building can be
achieved more rapidly in RTAs and bilateral FTAs.  Members of RTAs or bilateral trade partners are
more likely to be prepared to be bolder in trade liberalization.  RTAs and bilateral FTAs can play
catalytic role in moving the WTO forward.
Chapter II(5)(i), para. 44
What is the current position of Singapore concerning foreign investment in the electricity services and
air transportation sectors?  What steps have been taken to liberalize access in these sectors over the
past four years and are any further initiatives planned?WT/TPR/M/67
Page 28
There are no foreign equity limits in Singapore Airlines and SilkAir.  However, "substantial
ownership" and "effective control" by Singapore interests are still required of our airlines under most
of our bilateral air services agreements.  However, we are willing to liberalize the designation criteriaof airlines with other like-minded countries.  As such, some of our air services agreements have been
updated to the "principal place of business" and "effective control" criteria where possible.
The public electricity industry in Singapore was restructured in 1995 from a state monopoly
into a competitive market.  As Singapore was a pioneer then in the electricity deregulation, we took a
cautious evolutionary approach in the restructuring.  We formed Singapore Power as a verticallyintegrated group of companies with wholly owned subsidiaries in power generation, power
distribution and power retail.  Tuas Power, a wholly-owned subsidiary of Temasek Holdings was set
up to compete against the generation companies of Singapore Power.  Since then, SembCorp Cogen, a
joint venture by SembCorp Engineering and Tractebel, a Belgium based company, was granted a
public licence to generate electricity in Singapore.  A number of petrochemical companies have also
firmed up their plans to invest in co-generation faci lities to generate power to meet the requirement of
their chemical complexes.  In April 1998, we established the Singapore Electricity Pool as awholesale electricity market to further facilitate competition in electricity generation and supply.
The Singapore Government has since announced its decision to further liberalize the
electricity sector in March 2000.  The aim is to ensure that Singapore enjoys the most competitive
utility rates in the world.  The changes proposed are substantial and are targeted for completion within
15 months.
On power generation, Temasek Holdings will divest fully all generation companies under
Singapore Power and Tuas Power.  There will be no foreign ownership limit.  We have decided to lift
the restriction on foreign ownership to increase co mpetition and raise our standards to international
levels.
Similarly, the electricity retail sector will be made contestable to enable the gains of
competition in generation to flow through to the final consumers.  Foreign companies are welcomed
to offer retail service here.  We can look forward to full retail competition for large industrial and
commercial consumers from April 2001.  Retail competition for smaller customers will take longer
because all households are affected and a detailed study must be done first.  The electricity grid,
which is a natural monopoly, will continue to be regulated.
Chapter II(5)(ii), para. 47
With reference to the special license required for the production of certain goods, what are the
criteria for determining that these products ar e "undesirable" and "do not promote the economic and
social well-being of Singapore"?
The intent of the COM Act is to make provision for the regulation and control of the
manufacture of goods that do not promote the econom ic and social well-being of Singapore.  Hence,
the list of products is constantly reviewed.  The rationale for including the various items are generally
self-explanatory, for instance:  (i) cigarettes, cigars, beer and stout (health reasons);  (ii) firecrackers,
matches (social hazard);  (iii) optical disc (IPR protection) and (iv) air-conditioners, pig iron and
sponge iron, etc., (energy, water and land optimization).WT/TPR/M/67
Page 29
Chapter III(2)(iv), para. 20
Will Singapore ensure that the gap between taxes levied on imported beer, stout and samsoo and their
local counterparts is removed?  Why does Singapore treat imported beer less favourably than otherimported alcoholic products (through its combination of excise taxes and duties)?
The difference in taxes is partially attributable to historical legacy.  However, through the
years, Singapore has narrowed the gap between taxes levied for beer, stout and samsoo, and would
continue to do so.
In order to remove market distortion between im ported and domestic alcoholic beverages, will
Singapore consider replacing heavy tariffs with ad valorem tariffs charged on imported alcoholic
beverages?
Singapore advocates specific duty rates for these products as they are easy to administer and
would ensure stability in the level of revenue collection.  Such heavy duties are also imposed for
reasons such as protection of community well-being and health reasons.  We note that many other
developed countries also impose specific duty rates on liquors.
Chapter III(2)(viii), para. 48
When does Singapore anticipate submission of its statistical reports, as required by the
WTO Agreement on government procurement (GPA)?
What measure does Singapore take to ensure that procurement policies are transparent, open and
fair, and that procedural transparency is achieved  for procurement not subject to the GPA, including:
(i) transparency of information on procurement opportunities;(ii) transparency in qualification and bid documentation;
(iii) transparency in the evaluation process;  and
(iv) transparency of decisions on qualification and contract awards.
The amount of information required to be collected is substantial and detailed.  It will take
some time to compile the necessary reports, as our procurement responsibilities have been
decentralized to the various government agencies.  The collation of the required statistics will likely
be completed by the end of this year.
We have reviewed the procedures for all government procurement to ensure full compliance
and consistency with the WTO GPA.  In many instances, Singapore’s level of transparency for the
various aspects of government procurement matters  is higher than that of the WTO GPA.  For
example, the full schedule of tender prices received from all parties is posted on GITIS (Government
Internet Tendering Information System);  whereas the GPA only requires that the successful bid be
posted.
Chapter III(4)(vi), paras. 128-151
Canada welcomes the steps Singapore has taken to enhance intellectual property protection,
including accession to the Berne Convention and the enactment of geographical indications and
integrated circuits legislation designed to fu lly implement Singapore's TRIPS obligations.  WillWT/TPR/M/67
Page 30
Singapore enact measures to strengthen public enforcement of intellectual property rights to replace
the current "self-policing" approach which often shifts to owners the onerous burden and expense of
investigating and prosecuting infringement?
Intellectual property enforcement in Singapore is similar to that of other countries, in
accordance with TRIPS.  In addition to investigation and prosecution by the Singapore Government
on its own, we adopt a cooperative approach towards IPR enforcement, in which the authorities and
the industry combine resources to curb piracy.  We believe that IPR enforcement would be enhanced
through joint efforts between the industry and Government.
We note that this approach is not unique to Singapore.  In fact, it is the general view of
officials in various countries involved with intellectual property policy that, except in the case of
syndicates, civil action by right holders is more effective.  An injunction by a civil court will enable
the infringing action to be stopped immediately and any future non-compliance with it can be treated
as contempt of court with a possible punishment of imprisonment.
As in other jurisdictions IP owners also freq uently conduct their own investigations to gain
intelligence on the sale and distribution of infringing articles, and cooperate with authorities to assistin prosecution.  However, this does not mean that the burden of IPR investigation and prosecution is
shouldered entirely by the industry.
In fact, the Singapore Government has demonstrated that it is prepared to act decisively on
IPR enforcement, even going beyond international re quirements.  For example, although there is yet
to be international consensus on how regulation of optical media productions and manufacturingfacilities should be tightened, Singapore has put in place strong legislation to license optical disc (OD)
manufacturers and control the imports of optical media production and master equipment in 1998.
Chapter III(4)(vii), paras. 155-157
Given the extent of involvement of Government Linked Corporations (GLCs) in the Singapore
economy, what measures will Singapore take to ensure that these GLCs do not enjoy unfairadvantage, including the possibility of cross-subsid ization between GLCs and their subsidiaries, due
to their connection with the public sector and the Singapore Government's premier investment
holding company, Temasek Holdings?
The Government does not tell the GLCs what th ey should or should not do.  They compete in
the marketplace without preferential treatment from the Government.  In fact, in the area of promotingcontestability, the Government has been progressively opening up the various sectors to competition
by both foreign and local firms, e.g. in the fields of telecommunications, electricity and transportation.
Given the dominant position held by Temasek group companies in the Singapore economy and the
unfair advantages that they may enjoy due to their size and affiliations, what plan does Singapore
have to further its privatization efforts especially  in the broadcasting, telecommunications, property,
and energy sectors.
The major unlisted government-linked companies under Temasek include PSA Corp.,
Limited (port operator), Singapore Power (utilities) and SMRT (subway).  SMRT has already
announced its plans for flotation.  The government also announced plans to divest its share in the
power generation business.  Media Corporation of Singapore (broadcasting) has also announced in
March 2000 that it has submitted plans for a public listing to Temasek Holdings.WT/TPR/M/67
Page 31
Chapter IV(4)(iv), para. 50
We have noted from the Secretariat's Report that in an effort to make Singapore an international
financial centre, the Monetary Authority of Singapore (MAS) has placed a particular emphasis onfund management activities.  However, we unde rstand that Singapore restricts life insurance
companies from engaging in asset management activities.  What is the policy rationale of this
restriction?  Would MAS consider the application of  a foreign insurance company that has extensive
experience in fund management internationally?
Companies require an Investment Advisor (IA) licence if it wishes in general to offer asset
management products.  Direct life insurance companies are granted exempt IA status for the funds
received from their policyholders.  If they wish to offer non-insurance related unit trust products, we
require them to obtain an IA licence.  This is to ensure that financial institutions have the requisite
capital strength and meet the licensing requirements needed to operate a fund management business
professionally.  The admission criteria for IA licence apply equally to all applicants, including
insurance companies.  MAS may however, require the asset management activities to be conducted
through a separate subsidiary of the insurance company.
Chapter IV(4)(iv)(b), para. 54
Canada welcomes the recent measures Singapore has  taken to liberalize its banking sector,
specifically the issuance of new Qualifying Full Bank and Restricted Bank licenses to foreign banks.
However, we note that the number of such licenses is quite small relative to the number of qualified
foreign bank applicants.  How will the government ensure that the process for issuing new licenses isfully transparent?
In October 1999, the government granted eight new Restricted Bank Licenses, two more than it
originally committed for the 1999-2001 period.  Does Singapore plan to issue additional Restricted
Licenses before 2002?  What is the rationale for limiting the number of such licenses?
The number of QFBs and restricted banks under the liberalization programme was fixed at the
outset for the first three years.  This is to allow MAS manage the process and avoid an unorderly "big
bang" which may precipitate unhealthy market practices and banking crisis seen in several countries
that liberalized their financial markets too quickly.  The issuance of these licences is based on the
applicant's prudential soundness as a principal consideration;  and its commitment to grow financial
activities in Singapore as measured by the size of its existing and projected operations in Singapore.These broad criteria have been made known publicly.  The actual applications made by banks contain
confidential and proprietary information such as concerning the applicant's risk management system
and business plans, and are not intended for public disclosure.
MAS will re-open application for the remaining two QFBs in January 2001.  Late entrants are
unlikely to be disadvantaged significantly given the already mature retail banking sector, and therelatively short time lag between the entry of the two batches of QFBs.  In this respect, we note that
the four awarded QFBs have not yet made significant use of the privileges given to them.
MAS had announced that it will review the financial sector and the impact of the
liberalization programme in end-2001 before deciding on further measures.  At this stage, there is no
immediate intention to increase the planned number of QFBs and restricted banks before the end of
2001.  Nonetheless, the MAS will assess earlier if necessary, depending on the rapid developments in
the global financial sector.WT/TPR/M/67
Page 32
Chapter IV(4)(iv)(c), para. 64
Canada is encouraged by the Monetary Authority of Singapore's announcement of 17 March 2000 to
allow new entrants into its direct insurance market , with immediate effect, and to not limit the number
of such new entrants.  However, in making the announcement, MAS indicated that it reserves the right
to impose conditions on market entry to ensure "policy holders' interests are not compromised."
What is the nature of the conditions MAS is contemplating?
MAS may require potential entrants to the life  insurance industry to be subsidiaries rather
than branches.
Chapter IV(4)(iv)(d), para. 70
Canada is pleased that foreigners will be able to become members of the new merged Singapore
Exchange, and that certain foreign financial institutions will be given an opportunity to become
shareholders.  Can Singapore outline the measures th at will be implemented to ensure transparency
in the determination of which foreign institutions will be permitted to purchase shares?  Does the
government plan to publish criteria?
As the Singapore Exchange (SGX) is a key part of Singapore's financial sector infrastructure,
there is a need to ensure its smooth transition to a profit-oriented, limited company.  In the initial
stage, the continued success of the new integrated exchange is dependent on the commitment of
existing members.  These members are hence allocated shares in the SGX.  To enlarge its shareholder
base, SGX has engaged an international investment bank to invite a pool of strategic investors, both
local and foreign, with long term interests in the business of exchanges, or Singapore's capitalmarkets, or in strategic alliances with the SGX, to take up significant stakes in SGX.  This process
will be driven by SGX's strategic and commercial considerations, not policy considerations.
Thereafter, SGX is targeting a public listing within five years, to give SGX some time to consolidate
its resources and develop new strategies.
The percentage of total shares owned by brokers will be subject to a ceiling of 75% and a
floor of 33 1/3% to ensure that brokers retain a significant but not an over-dominant stake.  To
diversify ownership pool, MAS may approve sharehol dings exceeding 5%, as in the case of other
demutualized and for-profit exchanges.  This will also help prevent excessive ownership by any one
party in the exchange, as part of Singapore's ke y financial infrastructure, without the regulator's
knowledge.  Subject to these prudential considerations, it is unlikely that we will cap foreigninvestments in SGX.
Chapter IV(4)(ix), paras. 129-137
Singapore is recognized as a leading financial and commercial centre.  Will Singapore take steps to
ensure the easier accreditation of foreign professionals to facilitate the provision of professional
services by them?
The registration requirements for foreign professionals to practise in Singapore are
transparent, and designed to facilitate Singapore’s transformation into a knowledge-based economy
and a talent capital.  Depending on the profession, qualifications and experience, professional
registration may not be necessary.
Singapore will periodically review these requirements in order to ensure that they remain
relevant to our needs.  For example, Singapore amended the Accountants Act, so that effective as of
1 January 1999, foreign professionals seeking to provide taxation services no longer need to beWT/TPR/M/67
Page 33
registered with the Public Accountants Board, nor do they need to be effectively resident in
Singapore.  The WTO Secretariat had also noted that Singapore is currently reviewing requirements
for foreign law graduates (WTO Document WT/TPR/S/67, para. 133).
Singapore will consider on its merits, a request by a Member pursuant to Article VII of the
GATS, to recognize the education or experience obtained, requirements met, or licenses or
certifications granted in that Member.
Chapter IV(4)(ix)(b), paras. 133 and 134
We note that Singapore made no commitments with regard to legal services in its GATS Schedule.
However, according to paragraph 133, there is presently in place a regime which permits the entry of
foreign law firms to set up offices in Singapore to advise clients on the laws of their home country or
international law.  Does the Government of Singapore intend, in the current services negotiations, to
undertake commitments with respect to foreign legal consultants?
Please refer to responses given to Australia.
EUROPEAN UNION
Secretariat Report (WT/TPR/S/67)Regional and bilateral trade relations (pp. 32-36)
We note and deplore that no reference is made in this section to the ASEM.
It appears that trade facilitation issues such as the harmonization and simplification of customs
procedures feature in all the agreements and cooperation fora in which Singapore is a participant
(ASEAN, APEC, ASEM and potential bilateral trade agreements).  Does Singapore also support thenegotiation of a set of basic WTO rules and principles in this area?  What are, in its view, the main
obstacles to all ASEAN Members of the WTO subscribing to such initiative?
Singapore firmly believes that ASEM provides a strategic link to marry Asia’s immense
market and economic dynamism with Europe’s strengths in value-added manufacturing and
technology.
In fact, Singapore is a founding member of  Asia-Europe Meeting (ASEM), launched in
March 1996.  Singapore participates actively in all ASEM meetings, and supports fully the various
ASEM trade and investment initiatives such as the Trade Facilitation Action Plan (TFAP), the
Investment Promotion Action Plan (IPAP), and the Asia-Europe Business Forum (AEBF).
As a small country heavily dependent on trade, we are generally in favour of WTO rules on
trade facilitation.  Possible obstacles to such initiative could be a lack of financial resources and
technical expertise.
Bilateral trade agreements (p. 35, para. 40)
It is mentioned under this paragraph that Singapore is currently negotiating a bilateral free-trade
agreement with New Zealand and considering the possibility of similar agreements with Mexico,Japan and Chile.  Given that virtually all its applied tariffs are free, what would be the leverage of
Singapore in such negotiations and what would it seek to obtain from the countries in question?WT/TPR/M/67
Page 34
See Singapore’s written answer to similar questions posed by other delegations (under the
heading “Free Trade Agreement”).
Non-preferential rules of origin (p. 42, para. 18)
It is mentioned under this paragraph that "Singapore notified the WTO Secretariat that it has no
non-preferential rules of origin".  Paragraph ten on page 40 nevertheless indicates that "certificates
of origin may (also) be requested by authorized chambers of commerce if they are required to issue
certificates for goods that are subsequently re-exported from Singapore".  The figures in Chart I.4 on
pages 15 and 16 also suggest that re-exporting activities are very significant in Singapore.  CouldSingapore explain:
- What is the definition of a re-export for the purpose of compiling such statistics?  Which
degree of processing is allowed in Singapore on imported goods for the export of the
resulting products to be considered as a "re-export"?
- On the basis of which rules and criteria are certificates of (non-preferential) origin
issued in Singapore on exported (or "re-exported") products whenever such certificates
are required by the importing country?
Re-exports refer to all goods which are exported from Singapore in the same form (including
goods which have undergone minor processing, such as re-packing, splitting into lots, sorting or
grading, marking and the like) as they have been imported.
For the purpose of conferring origin on:
A. Local Origin Goods
Singapore maintains non-preferential rules of origin (ROO) at 25%
1 local content based on
ex-factory price.  However, products which have  only undergone the following “minimal processes”
will not qualify:
(a) operations to ensure the preservation of products in good condition during transport
and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur
dioxide or other aqueous solutions, removal of damaged parts and like operations);
(b) simple operations consisting of removal of dust, sifting or screening, sorting,
classifying, matching (including the making up of sets of articles), washing, painting,cutting up;
(c) changes of packing and breaking up and assembly of consignments, and simple
placing in bottles, flasks, bags, cases, boxes fixing on cards or boards, and all other
simple packing operations;
(d) affixing of marks, labels or other like distinguishing signs on products or their
packaging;
                                                     
1 Some countries impose certain percentage content or other criteria to qualify the product as being of
Singapore origin for the products to be imported into their countries.  For example, tape recorders, radios andtelevision receivers exported to the EU must have at least 45% local content.  We will check the cost statementsto verify that this requirement is met before we issue the Certificate of Origin.WT/TPR/M/67
Page 35
(e) simple mixing of products, whether or not of different kinds;
(f) simple assemble of parts of products to constitute a complete products;
(g) a combination of two or more operations specified in (a) to (f);(h) slaughter of animals.
To ensure accurate declaration of origin, authentication is carried out in two stages:
(a) Stage 1 – The authorizing agency, Trade Development Board (TDB) conducts visits to
factory to verify if the processes carried out do not come under the “minimal
processes” list.  The company will only be registered as a Singaporemanufacturer if this criterion is met.
(b) Stage 2 – After registration, the manufacturer is required to submit a Cost Statement
proving that the product has attained the minimum local content requirement of
25% at ex-factory price.  Only then will Singapore origin be conferred upon the
product.
Normally, certification is not required for non-preferential treatment.  However if origin
certification is required, TDB as well as Authorised Organisations such as the Chambers ofCommerce can issue Ordinary (i.e. Non-Preferential) Certificates of Origin (COs).
B. For Imported Goods for Re-Export
Under the Regulation of Imports and Exports Regulations, TDB authorized the Authorised
Organisations (AOs) namely:
(a) Singapore Chinese Chamber of Commerce and Industry
(b) Singapore Indian Chamber of Commerce and Industry
(c) Singapore International Chamber of Commerce
(d) Singapore Malay Chamber of Commerce and Industry
(e) Singapore Confederation of Industries
(f) Singapore Commodity Exchange Ltd (for rubber products only)
to issue non-preferential COs for local and foreign origin goods.  For local origin goods, they are to
follow the rules as stated under paragraph A.  For foreign origin goods, the AOs are governed by the
criteria stipulated under the Conditions and Operational Procedures for the Issue of Certificates of
Origin where they are required to call for the following documents before they issue the CO:
(a) CO from the supplier country;
(b) Foreign supplier’s invoice;
(c) Foreign Export Permit;
(d) Copy of signed Bill of Lading/Air Waybill from the supplier country or
(i) Declaration from – Foreign supplier
- Foreign exporter- Foreign manufacturer
(ii) Foreign Packing List andWT/TPR/M/67
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(e) Exporter’s Invoice and
(f) Any other documents that may deem necessary by the AOs.
Excise tax (p. 45 para. 31)
Singapore applies excise duties on spirits on the basis of a general standard bottle size
notwithstanding the real content of the imported bo ttle.  Is Singapore aware of the fact that certain
spirits are imported in bottles that effectively cont ain less than such artificial and fictitious standard
size?  Due to this difference in contents, European spirits are sometimes subject to higher excise
duties than would be the case if the calculation syst em took into account th e real content of the
bottles.  Could Singapore state the reasons why real content cannot be used as a basis for calculation
of excise duties?
It is inaccurate to say that Singapore does not allow the use of real contents as a basis for
assessment of excise duties on liquors.  Regardless whether the liquor comes in a standard or
non-standard size, it will need to undergo testing to determine its volumetric content.  Duties would
then be assessed based on the volumetric content.
The use of standard size bottles is to facilitate the assessment of duty, so that the liquor need
not be repeatedly sent for volumetric analysis.  On ce it is determined that the volumetric content is
within the prescribed limits, subsequent shipment for the next three years would not need to undergo
such test.
Import prohibitions, 1996 and 1999 (p. 48 – Table III.6)
We note that Singapore bans the import of used motor vehicles more than three years old to minimize
traffic congestion and pollution.  What restrictions are placed on this category of vehicles
domestically?
The policy of banning the import of vehicles above three years is non-discriminatory and
helps to keep the local vehicle population young.  By preventing the fresh inject of old vehicles into
the local vehicle market, it helps the process of gradually phasing out old vehicles.  Studies haveshown that older vehicles are more pollutive and break down more frequently.  This adversely affects
traffic flow, and works against the policy of trying to optimize the utilization of our road networks.
Safeguard measures (pp. 52-53 – paras. 46 and 47)
Could Singapore please provide a copy of Articl e 6 of the Common Effective Preferential Tariff
(CEPT) under AFTA.
Could Singapore explain the meaning of footnote 24  to para 47 (alignment with WTO Agreement on
Safeguards)?  Who agreed with whom concerning th e Interpretative Notes of the CEPT Agreement on
Article 6?  What was the content of such agreemen t?  Is there a written record? Could Singapore also
provide a copy of such record as well as of the Interpretative Notes of the CEPT Agreement on
Article 6?
We would further like to clarify that Article 6 only allows ASEAN member states to suspend
CEPT preferences (i.e. tariff preferences) provisionally.  As such, emergency measures invoked under
Article 6 of the CEPT Agreement would only have a direct impact, through the withdrawal of CEPT
preferences, on ASEAN member states.  It is stated clearly in Article 6(1) that such suspension of
preferences shall be consistent with the GATT.  Th is point is specified clearly in the InterpretativeWT/TPR/M/67
Page 37
Notes to Article 6(1) paragraph 2.  Interested Members can approach the Singapore Mission in
Geneva for a copy of the Interpretative Notes.
Standards, sanitary and phytosanitary measures (pp. 55-56, para. 62)
We welcome Singapore's policy to adopt internationally accepted standards and note that, as new
standards are introduced, they seem to be increasingly based on international standards.  Is there a
programme for revising existing standards with a view to harmonize them with international
standards?
Adoption and alignment of international standards is an important component of the
Productivity and Standards Board's standardization work.   The percentage of national standards
aligned to international standards had been increasing over the years and we expect this to continue,
particularly given efforts such as the initiative on alignment of standards in regional forum like the
APEC Sub-Committee on Standards and Conformance and ASEAN Consultative Committee for
Standards and Quality.
Financial services (pp. 97-107)
Comments
We consider that a number of elements are missing in  this part of the report which, in our view, would
have been worth mentioning.
For example, the report should recall that, according to its GATS Schedule, onshore establishment of
commercial banks and finance companies is not allowed in Singapore.  In addition, there were
ceilings on foreign ownership in existing commercial banks (lifted in 1999), and these are still inexistence for insurance companies (as mentioned in para. 62).
There are also important discriminatory regulations in banking and securities, namely as regards
establishment of ATM networks, additional sub- branches, and approval requirements for many
routine transactions.  New international member ship in the Stock Exchange of Singapore is unbound.
In line with international trend, we have shif ted our regulatory approach from a merit-based
approach to a disclosure-based approach.  Timely and adequate disclosures will allow investors to
make informed investment decisions and the market to  exert discipline to participants, both local and
foreign.  Our current risk-focused and disclosure-based supervisory approach has paved the way for
further liberalization of our financial sector and we have since announced the liberalization schedules
for our banking, securities and insurance industries publicly.
For the securities industry, the securities and derivatives exchanges have been demutualized
and merged as of 1 December 1999.  With the separation of ownership and trading rights, access to
the exchange is no longer controlled by the existing "club" members.  To lessen the impact on market
and the existing brokers, the new Singapore Exchange has adopted a gradual opening approach.  It
will admit new trading members from July 2000 and plans to fully open up its trading membershipfrom January 2002.  There will be no quota on the number of new members so long as they meet the
requisite prudential requirements.
Questions
According to paragraph 52 further liberalization is announced for banking (the 40% foreign
ownership limit in local banks has been removed in 1999).  Is there a precise timetable for the entryWT/TPR/M/67
Page 38
into force of these liberalizing measures?  Do they intend to bind that liberalization under the GATS?
The fact that the priority of reform is to protec t and strengthen a strong local banking presence would
suggest that this will be either not completely bound or subject to other limitations.  Is this assessmentcorrect?
The measure to lift the 40% aggregate foreign ownership of Singapore-incorporated banks
has already been implemented with effect from end-1999.  The objective of the reforms is to foster a
dynamic financial sector, without compromising systemic stability.  We are of the view that the latter
would require a significant local banking presence to underpin the strength of the financial system.We believe this is best achieved through having strong and competitive local institutions.  Singapore
will be looking to improve its GATS commitments  in future rounds.  The specific commitments
would, however, be subject to the pr ocess of multilateral negotiation.
Are there any other liberalizing measures foreseen in other financial services subsectors different
from banking?  This does not seem to be the case for insurance and securities.
MAS has, on 17 March 2000, announced that access to the direct insurance industry will be
liberalized with immediate effect.  It would lift  the 49% restriction on foreign ownership of local
insurers.  MAS would also adopt an open market entry policy for insurance brokers.  For reinsurers
and captive insurers, the existing open admission policy will remain.
Will the 49% limitation on commercial presence for foreigners for insurance companies be removed
as it has been the case for banking?  How about the restrictions on majority (foreigners must not be
the largest shareholder)?  The response from the government mentions plans to liberalize further.How is this planned and is there a time schedule?
As part of Singapore’s liberalization of its financial sector, the 49% restriction has been
removed with effect from 17 March 2000.  The intention of removing the 49% limit on foreign
shareholdings in locally owned direct insurance comp anies is to ease local in surers' efforts to forge
strategic alliances with reputable foreign parties to achieve greater capacity and economies of scale, aswell as to enhance product development and distribution capabilities.
MAS would also adopt an open market entry policy for insurance brokers.  For reinsurers and
captive insurers, the existing open admission policy will remain.
HONG KONG, CHINA
Secretariat Report (WT/TPR/S/67)Free Trade Agreements  (p. 3, para. 35 and pp. 35-36, paras. 40-41)
We note that Singapore is currently exploring with New Zealand, Mexico, Japan and Chile the
possibility of forming bilateral and plurilateral free trade agreements.  Would the Singaporean
authorities share with us the progress and details about the discussion?  In particular, is there any
relation between the negotiations of the Singapore/New Zealand FTA and the tri-party study involvingChile in addition?  Also, is there a possibility that the Singapore/New Zealand FTA will be integrated
into the AFTA-CER FTA should the latter be found feasible and a positive decision to establish the
FTA be taken?
As stated in the WTO Secretariat Report, Singapore has launched FTA negotiations with
New Zealand in September 1999.  The three rounds of FTA negotiations hitherto had been generallyWT/TPR/M/67
Page 39
smooth and positive, as Singapore and New Zealand are both very open economies, and free traders at
heart.  Both countries hope to conclude the negotiations by mid-2000.  Once bilateral negotiations
have been concluded, the details would be released accordingly.
The objective of the Singapore-NZ FTA is catalyse the pace of trade liberalization in APEC,
to move the grouping faster towards the Bogor goals.  It would be open to participation by other
economies.  Those who are ready to embrace the Bogor Goals would be welcome to join the FTA,
hence moving towards the creation of an APEC-wide FTA, and fast-track realization of the APEC
Bogor goals.  It is within this context that New Zealand, Chile and Singapore have agreed to atri-party study on the possibility of an FTA among the three countries, building on the bilateral
agreements between the three countries to enter into FTA studies.
Singapore’s FTA with New Zealand is also desi gned as a stepping stone towards a possible
FTA between ASEAN and CER.  The high-level task force established by ASEAN and CER
members would first have to examine the feasibility of establishing an AFTA-CER FTA by 2010.
Safeguards  (pp. 52-53, para. 47)
It is reported that Singapore may invoke emergency safeguard measure pursuant to Art. 6 of the
Common Effective Preferential Tariff (CEPT) under AFT A.  To what extent is the application of such
safeguard measures consistent with the MFN principle as provided for in Art. 2.2 of the
WTO SG Agreement?  It was mentioned in footnot e 24 that the Interpretative Notes of the CEPT
Agreement on Article 6 (Emergency Measures) w ould be aligned with the WTO Agreement on
Safeguards.  We are interested to know w hat alignments would be or have been made.
At the 12
th ASEAN Free Trade Area (AFTA) Council Meeting held on 6 October 1998 in the
Philippines, the AFTA Council agreed that the application of emergency measures must be consistent
with the WTO Agreement on Safeguards.  This decision is duly reflected in the interpretative notes to
Article 6(1), paragraph 2 which reads as follows “The suspension of CEPT preferences under
Article 6 of the CEPT Agreement shall be consistent with Article XIX (Emergency Action on Importsof Particular Products) of GATT 1994 and the WTO Agreement on Safeguards with special reference
to the following Articles of the Agreement:  (i) Article 3:  Investigation;  (ii) Article 4:  Determination
of Serious Injury or Threat Thereof;  (iii) Article 6:  Provisional Safeguards Measures;  (iv) Article 7:
Duration and Review of Safeguard Measures;  and (v) Article 8:  Level of Concessions and Other
Obligations”.
Investment (pp. 37-38, paras. 48-51)
The Secretariat Report states that the Government provides a wide range of investment incentives on
an NT basis to encourage investment in Singapore and in the high value added sector.  Would the
Singaporean authorities please provide an estimate of the revenue forgone as a result of these
measures and explain if they have any plans to do away with the incentives in the longer term?
The underlying assumption in having a tax expenditure statement is that the cost of tax
incentives are measurable against the benefits.  We see the benefits as both tangible and intangible,
economic and social, short-term and long-term, etc.  We do not see the practicality of such a complex
measurement exercise, which is why we do not prepare tax expenditure statements.  We would be
happy to know how fiscal governance of countrie s with tax expenditure statement has improved on
account of the publication of such a statement.
But what is apparent to Singapore is that the success or failure of an economic strategy
depends on the complex interplay of a host of factors.  When making an investment decision, aWT/TPR/M/67
Page 40
company will consider, inter alia , political and social stability, infrastructure, labour productivity,
industrial relations, transparency of the business environment and taxation.  Singapore therefore
employs a holistic strategy to promote ourselves as  an investment friendly environment, including
enticing potential investors with incentives that are WTO-consistent.
But having said that, tax incentives are not and will not be lightly given.  Given that corporate
tax made up 44% of total government operating revenue and that we have no natural resources,
Singapore is heavily reliant on our financial reserves in times of difficulties.  We therefore need to
observe fiscal prudence, and make sure that our tax revenue flows are reliable and sustainable.  Thiswill continue to be a fundamental governance tenet.
Standards, Testing and Conformity Assessment  (pp. 55-56, para. 62)
It is noted that Singapore's policy is to adopt internationally accepted standards such as those
developed by the ISO, IEC, and Codex Alimentarius.  It is mentioned that at the end of March 1999,
Singapore has 850 standards, of which over 30% were aligned with international standards.  We are
interested to know if the Singaporean authorities have any plan to expedite the adoption of
international standards.
Standards are reviewed every five years on average, consistent with ISO's practice.  As we
have a policy to align our standards to international standards wherever possible, priority is given in
reviews to consider such alignment.
Sanitary and Phytosanitary Measures (pp. 59-60, para. 74)
It is mentioned that Singapore has developed some broad guidelines on imports of agricultural
products derived from genetically modified organisms, and the specifics of the guidelines are still
being studied.  Would the Singaporean authorities share with us the broad guidelines and the latest
progress of the development of the specifics of the guidelines?
Singapore has in place the "Singapore Guidelines on the Release of Agriculture-related
GMOs".  The objective of the Guidelines is to ensure the safe import, release and use ofagriculture-related GMOs in Singapore and provide a common framework for (i) the assessment of
risks for agriculture-related GMOs to human health and the environment and (ii) the approval
mechanisms for the release of agriculture-related GMOs in Singapore.
Competition Policy (pp. 82-83, paras. 156-158)
It is mentioned that there has been a recent debate on the role of government-linked corporations
(GLCs) and their possible adverse impact on competiti on in the economy.  We are interested to know
more about Singapore's current policies and future plans for these GLCs, in particular whether and,
if so, how GLC operations will be reviewed in the interest of economic efficiency and market
contestability.
Please refer to responses given to the United States, Canada and Switzerland.
Banking  (p. 103, para. 55)
It is mentioned that the Monetary Authority of Singapore (MAS) considered it necessary for local
banks to consolidate among themselves to withstand in creased competition from foreign banks.  The
Singaporean Government has in fact taken steps in  this respect by merging POSB and DBS.  WeWT/TPR/M/67
Page 41
would like to know what role the Government has played in the merger, and if there are plans for
further mergers.
It is MAS' assessment that Singapore's small domestic market cannot sustain more than a few
large local banks which can become global players.  MAS has encouraged mergers among local banks
but MAS is in no position to direct advise local banks on whether and how they should merge.  The
latter is a decision which the banks' management and shareholders will have to decide on commercial
considerations.
POSBank was an important national institution, providing basic, low-cost banking service to
the general population.  It is therefore important that in addition to the price and business fit, we have
to ensure that POSBank remains committed to servic ing the vast majority of Singaporeans, especially
small savers.  The Government thus took the init iative to ask DBS to consider the possibility of
acquiring POSBank.  Thereafter, discussions and negotiations proceeded on a willing buyer willing
seller basis on commercial basis.  DBS, as a public listed company has full discretion to decide on the
commercial merits of the transaction and whether to acquire POSBank.  Both parties appointed
financial advisers to ensure fair terms and price – Goldman Sachs for the Government,Morgan Stanley for DBS.  When seeking sharehol ders’ approval for the transaction, the Government
abstain from exercising its voting rights, allowing independent shareholders to decide on the
transaction.
Insurance (pp. 104-105, paras. 58, 62-63)
MAS has recently announced a number of measures to liberalize the insurance sector.  Reportedly,
the liberalization package includes the lift of the 49% cap on foreign ownership in locally-owned
insurance companies;  the removal of restriction on entry for direct insurers;  and the adoption of an
open admission policy for new brokers.  We are interested in knowing more details, e.g.
implementation timetable of the measures , admission criteria for brokers, etc.
The insurance liberalization measures announced on 17 March 2000, took immediate effect.The admission criteria for brokers are as follows:  world ranking (for general insurance
brokers);  reputation, financial standing and track record;  business plans and projections;  and
commitment and ability to contribute towards deve loping Singapore as an international financial
centre, through transfer of expertise to local staff, and risk management and product innovation.
Port Services (p. 114, para. 97)
Pilotage service is currently provided only by the Port of Singapore Authority (PSA) Corporation, a
corporation wholly owned by the Singaporean Government.  It is noted that the Maritime and Port
Authority (MPA) would constantly review sectors that could be liberalized.  Do the authorities have
any further liberalization plans?  What particular circumstances will be taken into account in the
consideration of possible liberalization?
A large number of ships call at the Singapore port and it is essential to ensure that any
liberalization would not adversely affect the safety of the ships or the efficiency of shipping
movements.  Safety and efficiency are therefore key considerations in any liberalization.  Based on
such considerations, tug services have been fully liberalized and other sectors are being regularly
reviewed.WT/TPR/M/67
Page 42
Legal Services  (p. 124, para. 133)
Singapore has embarked on liberalization in the prac tice of local law by foreign law firms through
permission for practice under joint venture with local law firms.  It is noted that the number of such
joint ventures is restricted to five and the condit ion will be reviewed in five years.  This number
appears to be on the low side.  Would like to know if the authorities concerned have other plans to
further liberalize legal services.  Also, will Singapore consider translating the liberalization in this
respect into binding commitments under the GATS in the new Round of services negotiations?
Please refer to responses given to Australia.
JAPAN
Secretariat Report (WT/TPR/S/67)
Textiles and Clothing
It is reported that Singapore maintains three bilateral export restraints with Canada, the
European Union, and the United States.  Has the level  of restriction under each bilateral agreement
been increased annually in accordance with the ATC?  (Para. 88, p. 63)
The level of restriction under each bilateral agreement has been increased annually in
accordance with the WTO Agreement on Textiles and Clothing.
Competition and Regulatory Issues
It is reported that Singapore has no legislation on competition policy, but that the growth and recent
liberalization of several services sectors has underlined the need for regulatory mechanisms in order
to ensure that incumbent, previously monopolistic, service providers allow competition to flourish.(Paras. 152-158, pp. 82-83)
- Does Singapore have any intention to enact a general competition law?
- How do the Singapore authorities cope with trans-border anti-competitive activities?
Please refer to the answer given to the Republic of Korea.
Government Procurement
According to the Secretariat Report, Singapore gr ants a 2.5% preference margin to ASEAN members
for the procurement of goods and auxiliary services under the ASEAN Preferential Trading
Arrangement.  Please explain how this preference conforms with the GPA.  (Para. 50, p. 53)
We note that the same question was raised during Singapore’s application and negotiation for
accession to the GPA.  Our reply, copied to members of the Committee on GP, was that the provisionsunder Article III.1(b) of the GPA allows us to extend the preferential treatment to other ASEAN
countries as none of them is a party to the GPA.  The matter was treated as closed after our
clarification.
Additional question raised:  Since GLCs are owned by the Government, should they not be
subject to GPA as well?WT/TPR/M/67
Page 43
GLCs should not be subject to GPA as they ar e no different from any other private company.
They operate on a commercial basis, and have to make their own commercial and operational
decisions based on what is best for the companies.  The GLCs are governed by the Companies Act,and those which are listed are accountable to their shareholders.
According to the Secretariat Report, Temasek Holdings, the Singapore Government's premier
investment holding company, manages investments in  36 government linked corporations (GLCs) with
an estimated value of S$345 million.  Furthermore, it appoints a chairman and directors to represent
the Government on the boards of these companies.   Please explain Singapore's view on whether it
believes that Government has control or influence over these companies.  Does Singapore have any
intention to include these companies in its offer under Annex 3 of Appendix I?  (Para. 115, p. 70)
SPS
It is reported that Singapore has developed some broad guidelines on the imports of those
agricultural products derived from genetically modified organisms.  Please provide further
information on what exactly are the "broad gui delines", including its views on, for example,
environmental safety, as well as food safety.
Interested Members can approach the Singapore Mission in Geneva for a copy of the
guidelines.
TRIPS
Since 1 January 2000, Singapore has the obligation to comply with the provisions of the
TRIPS Agreement.  Please describe the efforts made so far, as well as those to be made in the near
future by Singapore, in order to bring its legislation into effective conformity with the
TRIPS Agreement, including the enforcement of IPRs.
Singapore has completed and brought into force all its TRIPS implementing legislation.  This
was done one year ahead of the deadline of 31 December 1999 to fulfil a promise given to APEC.
Enforcement of IPR is part of the TRIPS implementing legislation or is covered by our
existing legal regime
Please explain further the measures taken, or to be taken, regarding the enforcement of copyrights to
cope with the illegal reproduction of works.  Please also explain how the dispute settlement system is
established for right holders, including foreigners, in order to be able to exercise their rights in light
of the TRIPS Agreement.
Enforcement of copyright in relation to the illegal reproduction of works is done – like in
other countries – by the authorities and the IP right holders.  Both criminal and civil action is taken.
The Government has introduced legislation on 17 April 1998 to licence optical disk
manufacturers and control the imports of optical media production and master equipment via
amendments to the control of Manufacture Act (CMA) and Regulation of Imports and ExportsRegulation (RIER).
The CMA amendment gazettes Compact Discs (CDs), Video Compact Discs (VCDs),
CD-ROMs, DVDs and DVD-ROMs as controlled items.  Manufacturers would only be permitted to
manufacture these items if they receive approval from the Economic Development Board.WT/TPR/M/67
Page 44
The RIER amendments would ensure that no unauthorized manufacturers are able to obtain
mastering and manufacturing equipment to manufacture  optical disks.  Anyone who fails to obtain an
import permit from the Trade Development Board before importing such equipment will be guilty of acriminal offence.  The penalty for the first conviction is (i) a fine of up to S$100,000 or three times
the value of the goods, whichever is greater;  and/ or (ii) imprisonment for a term not exceeding two
years.  Subsequent offenders could face (i) a fine up to S$200,000 or four times the value of the
goods;  and/or (ii) imprisonment for a term not exceeding three years.
IPR holders can bring a civil action in the ordinary courts to enforce their rights.  The same
system of dispute settlement applies to local and foreign IP right holders.
It is reported that Singapore is presently consideri ng a new legislation for industrial designs.  Please
explain the outline of this new legislation, as well as the expected schedule for enactment.  (Para. 141,
p. 80)
Singapore is presently considering new legislation for the protection of industrial designs
which aims to modernize the industrial designs regime in Singapore.  The full details will be available
soon as the new legislation is expected to be introduced in Parliament sometime in the near future.
Services
Singapore's list of GATS Article II (MFN) exemptions covers various sectors.  The MFN exemption is
a derogation from the important principle of improv ing liberalization under the multilateral trading
system.  Please explain how Singapore intends to reduce such exemption.  (Para. 34, p. 96)
Please refer to response given to Australia.
It is reported that foreign participation in locally owned finance companies is restricted to 20%
(para. 49, p. 100).  Please explain the conformity of this restriction with Singapore's Specific
Commitments which says, "[t]he limit on aggregate foreign ownership of each domestic bank's share
has been increased from 20% to 40%".
We would like to clarify that in Singapore, finance companies are regulated under a separate
statue (i.e. Finance Companies Act) from commercial banks.  Hence, the 20% limit on foreign
participation in finance companies has no bearing on Singapore’s Specific Commitments for
domestic banks .
Japan appreciates reforms regarding offshore banks including increase of Singapore dollar lending
limits.  Does Singapore have any intention to further relax such limits?  (Para. 53, p. 103)
The MAS has been increasing the Singapore dollar lending limit for offshore banks over the
years.  The last increase from S$300m to S$500m was made in May 1999, as part of the liberalization
measures for the financial sector.  There is no immediate intention to raise the ceiling further since the
last increase was less than a year ago.  However, the MAS continuously monitors the needs of
offshore banks to ensure that the limit are adequate for their purpose.
It is reported that Singapore limits commercial presence by foreigners to 49% (on an aggregate
basis) of total equity in locally owned insuranc e companies, provided the acquisition does not make
any foreign party the largest shareholder in the company.  Does Singapore have any intention to relax
this regulation?  (Para. 105, p. 62)
Please refer to response given to the EU.WT/TPR/M/67
Page 45
It is reported that the integrated Singapore Exchange, which was launched on 1 December 1999, will
admit new members from July 2000, but that, initially, new members will be able to trade directly
with local investors for a minimum value of S$500,000.  This limit will be reduced to S$150,000 afterone year, in July 2001.  (Para. 70, p. 107)  Please explain the objectives of this minimum value
requirement.
The main objective of the limit is to phase -in the increased competition in domestic retail
stock-broking to preserve stability in the transition towards a fully opened market.  The phasing-in
avoids an unbridled scramble for market share in retail business that can cause disruptions to themarket.  It also gives some time for local stock-broking firms, which rely on retail business, to adapt
to the new environment.
Investment
It is reported that there are no restrictions on inward foreign investment in most sectors.  Is there any
sector for which Singapore actually restricts foreign investment?  (Para. 43, p. 36)
As mentioned in the report, foreign investment has traditionally been welcomed in Singapore
and has accounted for a significant share of total investment in the economy.  A few sectors havesome limited forms of restrictions, and these are mainly in the services area.
It is reported that there is no specific legislation relating to foreign investment.  Has Singapore
established an enquiry point where investors can obtain information on legislation and on scheme
regarding investment?  (Para. 46, p. 37)
Generally, foreign investors consult the public accounting firms or legal firms on the various
legislation relating to investments.
It is reported that a special licence is required from the Registrar of Manufacturers under the Control
of Manufacture Act for the production of certain goods in certain cases.  It is also reported that the
Act aims to curb the undertaking of manufacturing activities of undesirable products that do not
promote the economic and social well-being of Singapore and that specific reasons are given forplacing each of the goods currently listed under the Act.  Please explain the specific reasons why a
licence requirement for, respectively, air-conditio ners, pig iron and sponge iron, refrigerators, rolled
steel products and optical disks, is necessary.  (Para. 47, p. 37)
Please refer to response given to Canada.
Various incentive measures are described in paras. 48-51, pp. 37-38.  Which section of the Singapore
Government monitors such incentives so that they do not fall under the subsidies prohibited in the
Agreement on Subsidies and Countervailing Measures?
The Ministry of Finance and the Ministry of Trade and Industry.
The Government's industrial strategy and activities of statutory boards are explained in
paras. 109-114, pp. 68-70.
- Please explain the criteria for identifying the sectors which are important towards the
Government's industrial strategy.
- Do the incentive measures, which are part of this strategy, comply with the Agreement on
Subsidies and Countervailing Measures?WT/TPR/M/67
Page 46
- Do the incentive measures not give preference to the use of domestic goods over
imported goods?
- Please also confirm that the incentive measures are not export subsidies.
Singapore's vision is to become an advanced and globally competitive knowledge economy
within the next decade, with manufacturing and services as its twin engines of growth.  The strategy is
to diversify among and within the various industry clusters, as a balanced and robust mix of industries
and markets will help to achieve sustainable growth.
Our incentives comply with the Agreement on Subsidies and Countervailing Measures.  They
do not give preference to the use of domestic goods over imported goods and are not export subsidies.
Does Singapore have any intention to review the operation of its investment regime as listed below?
(a) Most of the enterprises investing in Singapore rent industrial land or facilities from the
Julon Town Corporation (JTC).  Upon renewal of the lease contract, a new investment
with high productivity is required.
(b) When an investment into Singapore is approved as an Investment Holding, the expenses
incurred by investment that does not make a profit cannot be included in the losses of acompany, thereby such expense cannot be deferred over to the next fiscal year.
The JTC imposes certain minimum investment requirements on companies that wish to take
up land-based facilities on longer-term leases.  This move is to ensure that the limited land is allocated
to projects that can generate the highest value added during the period of the lease.  These investment
requirements are applied across all industries and to both local as well as foreign investors.
Under Singapore's tax regime, only trading losses can be carried forward as losses to the next
fiscal year.  This applies to all individuals and companies.  Investment holding companies normally
do not carry on a trade of selling and buying of investments but holding of investments.  The income
they derive such as dividends and interest are investment income, and not trade income.  Thus, any
expenses incurred to derive the investment income  in excess of such income are not trading losses,
and therefore cannot be carried forward.
REPUBLIC OF KOREA
(Secretariat Report)
Bound Rates and Applied Rates  (para. 2, p. 39)
According to the Secretariat's Report, there seems to be a noticeable gap between bound and applied
rates which, combined with the fact that only 70.5% of tariff lines are bound, creates a certain level of
uncertainty in Singapore's trade regime.  Is the Singaporean Government considering increasing its
tariff bindings from the current level and bringing bound rates more into line with applied rates?
The more important issue is that Singapore has undertaken tariff liberalization autonomously
even though the issue of modality for recognition of autonomous tariff liberalization in the WTO hasnot been resolved.  There are two parts to liberalization.  The first is to reduce virtually all our applied
tariff rates to zero.  Thus, in practical terms, we are more open than many other Members.  The
second part is to bind our tariff lines and this would very much depend on what others are prepared toWT/TPR/M/67
Page 47
do in future negotiations.  As a result of the Uruguay Round negotiations, for example, we increased
the scope of our tariff binding from less than 1% in 1992 to 70% at the end of the round.
Competition Policy (paras. 152-155, p. 82)
The Report highlights that "Singapore has no legislation on competition policy;  according to its
APEC Individual Action Plan, Singapore depends on its free and open market ensures a competitive
environment in the domestic economy.  Nevertheless, the growth of services sectors has underlined
the need to allow competition to flourish."  (…)  "In the goods sector" (…)  "there has been a recent
debate on the role of government-linked corpor ations and their possible adverse impact on
competition in the economy."
Why hasn't Singapore, as one of the most open a nd free market economies, adopted legislation on
competition policy?  Is the Government planning to adopt a legislation on competition policy in the
foreseeable future, given the development of services sector and the growing need to have a
competition policy in the goods sector?
Competition law is a complex subject where there is no agreement even amongst advanced
economies in dealing with the gamut of anti-competitiv e practices.  As a city-state, the best way for us
to curb anti-competitive practices is to open our door s to trade in both the goods and services sectors.
We will study how legislation can be improved to enhance competition.  More importantly,
we will also progressively amend our laws and regulations to open up as many sectors to competition
as possible.
FTA  (paras. 40-41 pp. 35-36)
Singapore is currently negotiating a free-trade agreement with New Zealand and conducting
feasibility studies on possible free-trade agreements with Mexico and Japan.  Given that Singapore
already maintains virtual absence of tariff protection and scarce use of non-tariff border measures,
Korea wonders how can such preferential arrangements be beneficial to Singapore's potential FTA
partners.
Singapore remains fully committed to the WTO.  The rules-based multilateral trading system
is the only mechanism to ensure a fair and predicta ble environment for all economies to engage in and
benefit from trade.  In addition, any FTAs that Singapore negotiates will be fully consistent with the
provisions of the WTO.  Singapore will continue to play its part to strengthen the institution of the
WTO, and further multilateral trade liberalization.  That is why we offered to host the firstWTO Ministerial Conference to signal our strong support for WTO.  Singapore was among the
earliest proponent for a new Round.
Import Prohibition on Used Motor Vehicles  (para. 2, p. 39)
Second-hand cars more than three years are prohibited to import on environmental grounds and for
traffic control reasons.  However, in Korea's view, there exists many other ways to control traffic andpollution, ways that fall short of an outright ban.  Korea would appreciate it if Singapore could
explain the rationale behind such policy.
Please refer to response given to the EU.WT/TPR/M/67
Page 48
Limitation on Employment of Foreign Workers in the Construction Industry
The construction industry in Singapore is subject to a number of government regulations.  For
example, for every five foreign construction workers, one must be Singaporean.  As the labour marketfor the construction industry is presently tight, this regulation does not help remedy labour shortage
problems experienced by foreign construction compan y operating in Singapore.  Also, the government
levies S$470/month per skilled workers on the emplo yer which, in addition to the already high wages,
represents a substantial burden for the employer.
We recognize that this matter pertains more to social and labour policies rather than trade policy.
However, because of its significant investments in the Singaporean construction sector, Korea wishes
to ask Singapore to review its regulations in this sector so as to facilitate the operations of foreign
construction companies.
Contrary to what is claimed, there is actually an over-supply of foreign workers in the
construction industry.  This over-supply has not only resulted in the poor productivity performance of
the industry (negative productivity growth in the la st four years), but has also spawned a host of
abuses (e.g. contractors supplying foreign construction workers to work in other sectors).  Hence,there is a need for controls such as the levy, depending ceiling (DC) and man-year entitlement
formula to moderate the heavy reliance on foreign workers in the industry.
On the foreign worker levy of S$470, we wish to clarify that this is the levy for unskilled
foreign construction workers.  The levy for skilled foreign construction workers is S$30.
SWITZERLAND
Chapter I(3)(ii) Monetary policy (para. 14, pp. 8-9)
The Monetary Authority of Singapore (MAS) monitors the SGD against a trade-weighted basket of
currencies within a target band:  can the Government of Singapore (GoS) be more precise about the
basket of currencies and the percentage of fluctuation allowed?  Why does the GoS think the
exchange rate has to be monitored and cannot freely fluctuate according to the market?
The primary objective of monetary policy is to promote price stability as the basis for
sustained economic growth.  The choice of exchange rate rather than money supply or interest rate in
controlling inflation is shaped by Singapore's high degree of openness to trade and capital flows.
Singapore's high import requirements mean that changes in world prices or the exchange rate exert a
powerful influence on domestic prices.  In addition, Singapore's openness to capital flows has made itdifficult to control other monetary aggregates such as money supply or credit.
In response to the financial crisis in Asia, the MAS widened the band within which the exchange rate
is allowed to fluctuate.  Now that financial markets in Asia have recovered, does the GoS plan to
come back to the narrower former target band?
The composition of the currency basket and the width of the band are not publicly disclosed
in order to maintain the efficacy of the monetary policy.  The band was widened during the Asian
crisis but has been narrowed back to pre-crisis level already.WT/TPR/M/67
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Chapter I(4)(i) Economic development policies (para. 18, pp. 11-12 and paras. 115, 116,
pp. 71-72)
The GoS is still a shareholder of Temasek Holdings that controls a wide range of companies in the
manufacturing and services sectors that have a dom inant position in the Singapore economy.  Prime
Minister Goh Chok Tong recognizes that Singapore should give more space to the private sector in
order to enhance competitiveness in the service sector.1  Does the GoS have a plan to privatize the
GLCs of Temasek?  If yes, which ones?
The Singapore Government is prepared to divest its shareholdings, but can only do so if the
market conditions are favourable and the price right.  Government shareholdings are public assets that
should be divested only if doing so would add value for Singaporeans.
Chapter III(4)(vii) Competition and regulatory issues (para. 157, p. 83)
"The GoS appears to be willing to divest in all bu t "strategic" GLCs".  Can the GoS explain what is a
strategic GLC?  Which GLCs controlled by Temasek are considered strategic and why?
Import and sale of imitation tobacco products "Goldkenn Cigar Chocolates"
In October 1999, the Swiss Company Goldkenn, one of the top ten duty free chocolate brands in the
world, was informed by the National Pharmaceutical Administration (Ministry of Health of
Singapore), that the sale of chocolate imitati on tobacco products in the form of cigars was
contravening Section 15 of the Smoking (Control of Advertisements and Sale of Tobacco) Act,
Cap. 309 "which prohibits the import and sale of imitation tobacco products".  The company was
requested to recall all the stock of the chocolate cigars they had imported, which the company did.
How does the GoS justify such a regulation in acco rdance with Article 2 to 4 of the "Agreement on
Technical Barriers to Trade"?  Could the GoS please elaborate.
The evident consequence of the varied and numerous diseases resulting from smoking
tobacco products has prompted Singapore to establish a set of comprehensive legislation to control the
sale and advertisement of tobacco products within the country.  Since 1993, the legislation on tobaccocontrol was expanded to include restriction of youth access to tobacco products.
Section 15(1) prohibits the import and sale of “any confectionery or other food products or
any toy or any other article that is designed to resemble a tobacco product or which is sold in a
package designed to resemble the packaging commonly associated with tobacco products”.  Such
products compromise the tough stand that Singa pore takes against the induction of youth into
smoking, by arousing their curiosity and encouraging experimentation with the use of the actual
tobacco products which are being mimicked.  The legislation is applied in a non-discriminatory
manner to both imported and local products.
The name and packaging of Goldkenn Cigar Chocolates have been designed to mimic a
tobacco product, specifically, cigars.  The words,  “CIGARS” and “CIGAR” are also printed on the
box cover as well as on the foil wrapping the individual wafer chocolate.  The import and sale of such
products contravene section 15(1) of the above Act.  However, our Ministry of Health (MOH) has
decided not to take punitive action, but has requested the companies to withdraw sales in Singapore
except the Singapore airport tax-free area.  The M OH would have no objection if the chocolates were
repackaged in such a way that no mention of cigars is made.
                                                     
1 Financial Times,  13 March 2000.WT/TPR/M/67
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UNITED STATES
Chapter II(3)(ii) Main Trade Laws
Please describe the Economic Expansion Incentives Act and the Income Tax Act., including details
regarding the objectives, the amount of funds, duration, and eligible recipients (including what
constitutes “eligibility”).
The Economic Expansion Incentives Act and the Income Tax Act are self-explanatory public
documents.  Details of the Overseas Enterprise Incentive Program can be found in the Economic
Expansion Incentives Act.
Chapter II(4)(ii) Regional and Bilateral Trade Relations
The protocol to implement the second pack age of commitments unde r the ASEAN Framework
Agreement on Services (comprising the expanded list of  seven priority sectors) entered into force on
31 March 1999.  ASEAN members have agreed to launch a new Round of negotiations to cover
additional sectors, including all service sectors and all modes of supply, beginning in 1999, with a
scheduled completion in 2001.
While we are supportive of Singapore's approach to services trade liberalization, we also remain
committed to ensuring that regional initiatives do not adversely affect multilateral trade
liberalization.  Has the ASEAN Fr amework Agreement on Services b een notified to the WTO Council
for Trade in Services, pursuant to Article V regarding economic integration agreements?  If not, why
not?  Can Singapore indicate when ASEAN members intend to notify the agreement?  What steps is
Singapore taking to ensure that this agreement is properly notified?
Please refer to response given to Canada.
Paragraph 35 discusses stronger linkages between ASEAN and the Australia-New Zealand CER.
Please advise the status of these discussions and what mechanism is envisioned to strengthen the
linkages between the agreements.  Does Singapore envision a single free trade area encompassing all
the participant countries?  Will the feasibility study be available to interested parties?  What is the
scope of this linkage? Will it cover both goods and services?
Paragraph 40 indicates Singapore is negotiating a bilateral free trade area agreement with
New Zealand and is studying the possibility of free trade area agreements with Japan and Mexico.
What is the status of these negotiations and studies?  What is the scope of the discussions?  Will these
agreements have a services component?  If so, please describe what is envisioned in coverage.
Does Singapore’s renewed interest in regional trade agreements reflect a fundamental policy shift?
Please refer to response given to Hong Kong, China.
Chapter II(5)(iii) Incentive Measures
Please explain the objectives of the Overseas Enterprise Incentive Program, including details
regarding the objectives, amount of funds, duration, and eligible recipients.
Details of the Overseas Enterprise Incentive Programme can be found in the Economic
Expansion Incentives Act.WT/TPR/M/67
Page 51
Please explain the objectives of the Regionalization Finance Scheme, including details regarding the
objectives, amount of funds, duration, and eligible recipients.
The Regionalization Finance Scheme is a financing programme designed to assist local
enterprises set up operations overseas.  It is part of the government's effort to assist local enterprises
globalize their operations.
Chapter III(2)(i)(a) Registration and Documentation
Paragraph 7 states that import permits are required for all goods except those specified.  How is this
permit obtained?  Does issuance of a Central Registration Number (CRN) by the Trade DevelopmentBoard (TDB) constitute a permanent import permit?  If not, does it  automatically ensure permits for
all imports by registered importers, or must importers still make application to the TDB for a permit
for each import?
All importers and exporters must register with the Trade Development Board (TDB) for a
Central Registration (CR) Number.  This CR Number  is for the purpose of identification.  They must
also register with our Customs and Excise Department (CED) in order to apply for permits through
the TradeNet System.  Each shipment still ha s to be covered by an import/export permit.
The TradeNet system appears to provide for expedited clearance of goods for registered traders.
Does the system allow registered importers to enter their goods immediately and pay appropriate
duties and taxes later, or must all applicable duties and taxes be paid upon entry?
TradeNet is our national Electronic Data Interchange (EDI) system for permit application.
The duties and taxes have to be paid before the goods could be released from customs control forlocal consumption.
Chapter III(2)(iv) Tariffs
We note that Singapore has applied rates of zero on all but four tariff lines, yet has bound only 70.5%
of its tariff schedule.  We applaud Singapore’s commitment to maintaining zero rates of duty, but the
disparity with its bindings can create uncertainty for exporters.  Has Singapore considered improving
its tariff bindings in a manner that is more consistent with its applied tariff practices?
Chapter III(2)(vi) Import Prohibitions and Licensing
Comment:   Paragraph 35, Table III.6 (Import Prohibitions 1996 and 1999) indicates that used motor
vehicles more than three years old are prohibited from being imported in order to minimize traffic
congestion and pollution.  However, this policy does not appear to take into account advancedtechnology in newer used vehicles.  Moreover, older vehicles already imported and in use in
Singapore are not subsequently regulated to minimize emissions.
Please describe when the Government might consider  eliminating this ban or revising it in a way that
relieves the cost burden on purchasing automobiles in Singapore, while maintaining pollution-control
standards and air quality objectives?
Please refer to response given to the EU.WT/TPR/M/67
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Chapter III(2)(v)(b) Goods and Services Tax
Singapore states that under the Major Exporters Scheme (MES), payment of the GST may be deferred
by a GST-registered importer/exporter until the goods are sold domestically.  A GST-registeredimporter/exporter is one that exports “51% or more of their total supplies.”  This would appear to be
a preferential action based on export performance.
GST is a consumption tax which is applicable across the board.  If the goods are not
consumed locally, no GST is payable.  Under th e Major Exporter Scheme (MES), the GST is only
temporarily suspended at the time of import and not totally relieved.  This is similar to all temporaryimport schemes where the goods are temporarily brought in for various reasons for subsequent
re-export.  In the case of the MES, GST is still payable if the goods are disposed of locally.
Please explain how this MES preference is consistent with Article I of the GATT 1994 and the TRIMs
Agreement.
Our MES is consistent with GATT Article I as no country is offered any special treatment or
preferences.  It falls outside the purview of the TRIMs Agreement as it is not an investment measure.
Chapter III(2)(vi) Import Licensing and Restrictions
Please confirm that the purpose of automatic licenses for those products listed in Table III.7 is solely
for statistical purposes.  If there are other requirements, please explain.
Products listed under Table III.7 are regulated through automatic licensing for health and
safety reasons, intellectual property rights enforcement as well as to meet our obligations arising from
international agreements such as the Montreal Protocol.
Chapter III(2)(xi)(d) Labeling and Packaging Requirements
Paragraph 76 discusses general requirements for the labeling of food products under the Sale of
Food Act.  In this connection, we understand that the Government is currently considering
requirements for the labeling of genetically-modified (GM) food products that would affect imports as
well.
Please explain the research undertaken by Singapore which serves as the basis for your
Government’s decision to explore new measures in this area, and when these new regulations are
expected to be announced?
Please identify the private sector groups, non-governmental organization, and other entities with
whom the Government has consulted in its consideration of this issue?  Will there be an opportunityfor other governments and the private sector to provide input to this process?
Singapore is still studying the issue of labelling of GM food products.  The issue is a complex
one as it involves a consideration of a variety of factors – the scientific distinction between genetically
modified and conventional foods, the cost of labelling, the regime of labelling permissible under
existing world trading rules, issues of enforcement etc.
We note that so far, there is no clear international direction or consensus on the issue.  Some
countries maintain that as safety evaluation on genetically modified foods is as stringent as on
conventional foods, there is no need to make a distinction between them.  Given the complexity of theWT/TPR/M/67
Page 53
issue, it is therefore difficult to say when any regulations or guidelines for the labelling of GM food
would be announced.
There has been correspondence in the press and questions have been raised in Parliament in
relation to labelling of GM food.  Further, public seminars have been held on the matter.  Where
possible, we would be open to an exchange of views on the GM food issue.
Chapter III(3)(iii) Export Prohibitions, Restrictions and Licensing
Paragraph 85 indicates that Singapore prohibits exports of certain products to certain countries in
accordance with UN Security Council Resolutions.
How, and to what extent, has Singapore been able to monitor and control the illicit export from or
re-export of products through its ports?
For every import/export, permits must be applied and approved by TDB, the relevant
Controlling Agencies (for controlled items) and Singapore Customs and Excise Department.
Monitoring and control are done through documentation audit checks, permit reconciliation of the
items against the shipping manifests as well as physical checks at the border.
Does your Government consider this to be a serious problem?
We do not consider the illicit export and re-export of prohibited products a serious problem.
Chapter III(3)(iv) Export Restraints
In your view, to what extent is there a problem w ith respect to the fraudulent transshipment of textile
and clothing products to the United States and other countries.
There have been reports on illegal textile transhipments from Asia to the United States and
the European Union.  We also understand that the United States Customs officials have been visiting a
number of Asian countries to investigate into allegations of transhipments.  The frequent visits by the
United States Customs officers to North Asia perhaps reflect the seriousness of the problem.
How, and to what extent, has your Government been able to monitor and control the fraudulent
transshipment of such products?
In Singapore, the Trade Development Board (TDB ) administers and controls exports of textile
and garments subject to quota to the U.S., the EU  and Canada through its Textile Export Control
System.  Under the system, all garment manufacturers wishing to produce garments for export under
the textile quota arrangement have to be registered with TDB.  Quotas are allocated by TDB to
registered manufacturers based on the company’s past year export performance and its productioncapacity.  In addition, TDB officers make periodic visits to manufacturers to verify production records
and fabrics purchases/imports to ascertain if the garments being exported were produced in Singapore.
Chapter III(4)(iii)(b) Industrial Strategy and the Public Sector:  State-Owned Enterprises
What is the Government’s general view regarding th e role of government linked corporations (GLCs)
in the country’s future economic development?  Do es it see GLCs as continuing to increase their
involvement and position in the economy, or are th ere plans to limit their involvement in certain
sectors?WT/TPR/M/67
Page 54
How does the Government assure that there is fair competition when applied to the operation of
GLCs?
Does the Government have specific plans to further privatize GLCs, and opening them up to greater
foreign investment?
The Government, through Temasek Holdings, is the majority shareholder of most
Government-linked companies.  But the Government does not manage the boards.  The GLCs make
their own commercial and operational decisions based on what is best for the companies and in light
or market demands.  Directors of GLCs have to comply with requirements and responsibilities underthe Companies Act, and in the case of listed GLCs, the directors have to account to all, particularly
minority, shareholders.
Please refer to responses to questions by Canada.
Chapter III(4)(vi)(e) Intellectual Proper ty Rights Penalties and Enforcement
Notwithstanding the increased efforts in Singapore to enforce intellectual property rights, as noted in
the Secretariat’s Report, the United States has concerns about the existing enforcement system.  This
system places the burden on the rights holder to police the market for infringing articles, make “test”purchases or hire private investigators to gather evidence of infringement, petition the courts for a
search/seizure warrant, and present a case to the police.  This “self-policing” policy has been
characterized by GOS officials as a “cooperative” approach;  when in reality it has the effect of
shifting the burden for enforcement of Singapore law to private parties.
Perhaps because of the self-policing approach and constraints on police, we understand that national
housing authority and censorship officials have been deployed to help address the rampant retail
piracy problem.  Please provide an assessment of the activity and effects of other non-police
governmental authorities in addressing piracy.
Has the Government of Singapore considered establishing an anti-piracy police task force to boost its
enforcement activities?
Like in other countries, the problem of IP enforcement in Singapore is a complex one.  A
multi-pronged effort is required to counter it.  Th e involvement of all – the authorities, the right
holders and the public – is necessary.  In Singapore, both criminal and civil remedies are provided.
Criminal action is taken by the authorities and can, in addition also be taken by the IP right holders.
In a criminal action by the right holder, he needs to produce reasonable evidence to commence anaction.
In Singapore, apart from the Police, the assistance of the Films and Publication Department
(FPD), the Hawkers Department and the People’s Association (PA) is mobilized to deal with retail
piracy.  The FPD, for example, initiated more than 280 raids in 1999, seizing 410,000 uncensored
videos, most of which were pirated.  The Hawker s Department seized over 69,000 pirated products in
its raids in 1999.  These multi-pronged efforts have helped to deal with the piracy problem and are
intended to send a strong and visible signal that the Government of Singapore will not tolerate the sale
and distribution of pirated articles.
There is already a specialized branch within the Police force dealing with anti-piracy
activities such as the conduct of raids and investigations into piracy syndicates.WT/TPR/M/67
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Citizens of Singapore appear to be among Asia’s mo st active users of the Internet.  Implementing and
achieving full compliance with the WIPO Copy right Treaty (“WCT”) and the WIPO Performances
and Phonograms Treaty (“WPPT”) would provide the copyright protections necessary to take fulladvantage of these new technologies.  For example, the WIPO Treaties require that signatories
ensure that enforcement procedures are available to permit “effective action” against covered acts of
infringement.
How does the Government of Singapore’s reliance on self-policing provide “effective action” against
acts of infringement, as required by TRIPS, the WCT and the WPPT.
It will be seen from the multi-pronged efforts employed by Singapore to tackle piracy that the
reliance is not only on action by IP right holders but on all who can assist in the effort to provide
effective action against piracy:  the police, the industry, the public and Government and statutory
agencies.
Paragraph 145 indicates that legislative amendmen ts in 1998 now permit seizure at the border, if a
copyright owner files a written notice with Customs ob jecting to the import of infringing material, and
that the seized material could be held for ten days while the copyright owner begin court proceedings.Regrettably, we have seen no evidence that this authority has been meaningfully exercised.
What has been Singapore’s experience in applying the amendments allowing seizure at the border?
Since the legislative amendments, how many such seizures have taken place?
Has the Government considered amending its laws to apply a similar “ten-day” rule with respect to
the seizure of suspected pirated optical disk products being sold in shopping malls?
Since the Singapore Government in 1997 orchestrated a voluntary code of conduct for optical disk
(OD) manufacturers and amended laws affecting the registration of OD production equipment,
Singapore officials, in other fora, have asserted that there is virtually no domestic production of
pirated OD products and that the problem is one of importation.
Please explain what steps Singapore has taken to strengthen IPR enforcement at the border;
including discussions with neighbouring countries that may be the origin of such pirated products.
Singapore has put in place a legislative regime, in accordance with the requirement of the
TRIPS Agreement, to deal with, inter alia,  the importation of counterfeit copyright goods.  It is up to
IP right holders to make use of the mechanism.  The authorities cannot be expected to do more.  It
could well be that, in many cases, the availability of the mechanism has, by itself, deterred potentialoffenders.
Pirated optical disks products sold in shopping malls are dealt with in accordance with the
criminal and civil remedy regime in place to deal with them.  We would be interested to know
whether any other Members have applied the “ten-day ” rule applicable to border enforcement to the
seizure of suspected pirated optical disk products being sold in shopping malls.
Singapore has an effective border enforcement regime that keeps vigilance over our entry
points to interdict smuggling of pirated products at our borders.  Last year, when our investigations
revealed that smugglers were smuggling pirated optical disks into Singapore, the Customs and Excise
Department intensified checks on cars, lorries and persons at our entry points.  In addition, the
Customs and Excise Department also conducted a number of successful “sting” operations, to further
deter such smuggling activities.WT/TPR/M/67
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It is our view that the U.S. is in a better position to get the countries which are the originators
of pirated products to stop the production.
The 1999 Copyright Amendment Bill extends copyright protection to the Internet and certain digital
works, thereby providing internet service prov iders (ISP’s) wide immunity from copyright
infringement for various activities.
Please describe your government’s rationale for providing such broad immunity, and explain whether
there any plans to reconsider the immunity provisions.
The amendments to the Singapore Copyright Act on protection for internet service provider
(ISPs) is intended to strike a balance between the rights of ISPs and others having an interest in the
digital work being transmitted.  They do not provide a broad immunity to ISPs.  The framework of the
amendments is similar to those of the U.S. Digital Millennium Copyright Act.  Immunity is provided
only for activities where the ISP’s role is merely as a passive carrier of electronic signals (much like
the role of a telephone company).  As for the limitation of liability in respect of materials residing on
the ISP’s own network at users’ direction, the limitation is removed once the ISP is notified by the
right holder of the presence of infringing material.
The 1999 Copyright Amendment Bill expands library and educational exceptions.  Singapore law
allows copying for educational purposes up to 10% of the bytes of a digital work without
authorization of the copyright owner.
How did the Government of Singapore come up with the 10% rule?  Are there any plans to reassess
the merits of the 10% rule?
Did the Government consider a judicial determinati on of what is fair use, based upon a consideration
of the facts in each case?
The exception for copying of 10% of the bytes of a digital work for educational institutions is
an extension of the existing exception in the law.  The digital area is a fast moving one and we will
continue to monitor international deve lopments in relation to the matter.
While Singapore appears to have taken some steps to  improve enforcement in  the trademark area, we
are not current on specific actions.
We would appreciate a description of the current trademark enforcement regime and recent
enforcement activities against trademark infringement.
Singapore’s legal system provides for both civil and criminal remedies for the enforcement of
the rights of trademark owners.  Civil action enables the trademark owners to seek damages and
injunction against further infringement and the surrender of infringing items.  In addition to criminal
prosecution by the State, criminal proceedings may also be initiated against the offender by the
trademark owner on fiats issued by the Attorney General’s Chambers.  Enforcement against
trademark infringement activities continues in the usual way.  Last year, the Police conducted over100 raids and seized counterfeit goods with an estimated street value of almost S$2 million.
Chapter III(4)(vii) Competition and Regulatory Issues
Does the Government have plans to develop legislation on competition policy?
If so, how is the Government proceeding to develop such legislation and in which sectors?WT/TPR/M/67
Page 57
Please refer to the response given to the Republic of Korea.
Chapter IV(4)(iii) Services:  Policy Objectives
Paragraph 38 indicates that the gradual reform of the energy sector is currently taking place.  Could
you provide more details as to what these reforms may be, and when they will be announced and
implemented?
Please refer to response given to Canada.
Chapter IV(4)(iv)(b) Banking services:  Policy Framework
The Report notes that foreign investment restrictions have been lifted for banks and, more recently,
insurance companies.  Does Singapore intend to remove the 20% restriction applicable to local
finance companies?  If so, when?  If not, why not?
Finance companies in Singapore together account for only a small fraction of the financial
sector, with only about 5% share of the total deposit and loan market.  They cater mainly to small
traders and businesses in Singapore.  The MAS is presently reviewing the role and function of finance
companies within the broad context of Singapore’s financial sector.  The review would cover the 20%
limit on foreign participation.  Currently, the 20% foreign ownership limit is reached for only two ofthe twelve locally-owned finance companies.  We ex pect the review to be complete some time this
year.
Chapter IV(4)(iv)(b) Banking Services:  Recent Reforms
Paragraph 52 describes recent reforms, including the plan to issue six QFB licenses to foreign banks
between 1999 and 2001 and to increase the number of re stricted banks from 13 to 20 by 2001.  In this
connection, four QFB licenses were issued in October 1999.  There is still considerable interest
among foreign banks in obtaining such licenses, and so me are also concerned that late entry to the
market would disadvantage them vis-à-vis earlier entrants.
Has the Government considered opening up the domes tic retail banking sector to full competition,
that is, issuing an unlimited number of QFB licenses to qualified foreign banks?  If not, pleaseexplain.  Will the Government consider issuing more than the currently planned number of QFB (6)
and restricted bank (20) licences before the end of 2001?
Will the Government consider issuing the remaining two QFB licenses earlier in order to minimize
the disadvantages of late entrants to the market?
Please refer to response given to Canada.
Chapter IV(4)(iv)(c) Insurance:  Policy Framework
Paragraph  62 still indicates that foreign equity ownership of local insurance companies is limited to
49%.  It is our understanding that this restriction was lifted by the Monetary Authority of Singapore
(MAS) on March 17.  Please confirm that this is the case.
Please refer to response given to the EU.WT/TPR/M/67
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Chapter IV(4)(vi)(c) Telecommunications:  Policy Framework
With the opening of the basic telecommunications market to full competition starting April 1, 2000,
please describe any plans to privatize Singtel.
SingTel was privatized in 1993.
Chapter IV(4)(ix)(b) Professional Services:  Legal Services
Paragraph 133 indicates that a Committee chaired by the Attorney General is currently considering
the issue of expanding the list of Government-recognized universities whose law graduates may
qualify for admission to the Singapore Bar.  When do you expect the Committee to complete its studyand release its conclusions?WT/TPR/M/67
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ANNEX II
FURTHER CLARIFICATION BY THE DELEGATION OF SINGAPORE
The following clarification concerning Singapore's rice licensing scheme was provided by the
authorities subsequent to the Meeting of the Trade Policy Review Body:
Under Singapore's licensing requirement, traders can import non-stockpile rice from any
source and in any amount.  No importers applying for licences to import non-stockpile rice have been
denied entry into our market so far.  Therefore, there is no conflict between the nationalindustrial/trade strategy and food import regulations in this instance.
Non-stockpile rice refers to specialty rice such as parboiled rice, glutinous rice, basmati rice
and brown rice.  These specialty rice are generally not normally consumed by the general public.
Ordinary licences are issued for these non-stockpile rice to prevent circumvention of our stockpiling
policy.  Specifically, licensing of all rice helps to prevent stockpile grades of rice being imported in
the guise of non-stockpile rice.
__________