WORLD TRADE  
ORGANIZATION  WT/REG227/2 
1 April 2008 
 
 (08-1436) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN PANAMA AND SINGAPORE 
 
Questions and Replies
 
  
 The following communication, dated 27 March 2008, is being circulated at the request of the 
delegation of Singapore.   This document reproduces the questions addressed to the Parties and the responses submitted.  
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Questions from the Delegation of Chinese Taipei
 
 
General observation  
 
1. Since this is the first bilateral FTA with a Latin American country for Singapore, we 
would appreciate it very much if Singapore could provide the details about the domestic 
decision-making process in terms of initiati on, evaluation and consultation, etc.  
 The idea of a bilateral FTA was first mooted during a meeting between then Minister for 
Trade and Industry George Yeo a nd Minister of Commerce and Industry Joaquin Jacome Diez in 
September 2003 on the sidelines of the World Trade Organization ministerial meeting in Cancun.  
Internal consultations, exchanges on mutual expe riences in FTA negotiations and discussions on the 
scope and framework of negotiati ons followed, and the FTA was launched in February 2004 in 
Singapore during the visit of Panamanian Vice-Presi dent Arturo Vallarino and Minister of Commerce 
and Industry Joaquin Jacome Diez to Singapore.  After three rounds of negotiations, the FTA was 
signed in March 2006.   
  As part of our domestic processes in connecti on with undertaking any FTA, we held briefings 
for, and consultations with, stak eholders such as our business commun ity and the relevant government 
agencies on the PSFTA.  International Enterprise (IE) Singapore, a statutory board under the Ministry 
of Trade and Industry, has also established a dedi cated FTA outreach unit to increase the awareness 
and use of Singapore's FTAs among Singapore-based companies as well as seek their feedback on 
FTAs.    Panama (our largest trading partner in Latin  America), which is home to the Panama Canal 
(a major container port) and the Colon Free Zone (the second largest Free Trade Zone in the world 
after Hong Kong's) is a major trading and transsh ipment hub in the Americas.  The FTA provides 
Singapore businesses with a more favourable opera ting environment in Panama, and enhances trade 
and investment flows between Panama and Singapore as well as the larger Latin American region.  In terms of coverage, the PSFTA is comprehensive,  covering market access for trade in goods, cross 
border trade in services, financial services, telecommunications, e-commerce, investment protection, 
competition, government procurement, transparency and dispute settlement.   WT/REG227/2 
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 Panama continued to be our largest trading pa rtner in Latin America.  Since the FTA entered 
into force in 2006, bilateral trade grew by 35% fro m S$4.3 billion in 2006 to reach S$5.8 billion in 
2007. "  2. We note that there are nine other bilateral FT As notified and in fo rce by Singapore.  We 
are wondering if the regulations for Rules of Origin in these ten FTAs are the same as or 
different from each other and how Singapo re complies with these RO regulations? 
 The Rules of Origin for the various FTAs that Singapore has concluded are not completely 
identical but they are based on one or a combination of the 3 general criteria - namely i) Change in 
Tariff Classification criterion, ii) Value-add criterion and iii) Process criterion.  The specific rules of 
origin might differ slightly from one FTA to anot her to take into account the sensitivities of each 
product in the respective FTA partner countries.   The Singapore FTA website (www.fta.gov.sg) 
provides detailed information for Singapore compani es regarding the product-specific rules for each 
FTA. 
 
Panama’s liberalization schedule
 
  In para. 27 of the factual presentation, we note that 238 agricultural products have not been liberalized after full implementa tion of the Agreement by Panama.  
 
3. As we know, Singapore is not an agricultural exporting country and, therefore, it should 
not be a main competitor to Panama’s dome stic agricultural market.  We are wondering 
Panama’s rationale to maintain those agricultura l products as dutiable items.  Could Panama 
provide the reasons behind this decision? 
 Panama keeps only one list of sensitive products, regardless of the trade partner with whom it 
is been negotiating with.  The rationale for th is trade negotiating strategy is the following: 
  (1) to eliminate from our negotiations any precedent of trade liberalization, without 
taking in consideration if the trade partner is an exporting country or not, to avoid 
arguments of market access  in sensitive products.   
 
 (2) to reduce possible trade triangulation from some countries in our market, in highly 
sensitive sectors, taking into account possible market access through any agreement. 
 
Questions from the Delegation of Japan
 
 
Safeguard mechanisms  
 4. With respect to Section III.D.2. (Paragraphs 46-48) of the Factual Presentation 
(WT/REG227/1), has either Party applied any safeguard measures to the other Party after entry 
into force of the Agreement?  Regarding global safeguards, were there any measures applied between Parties before entry into force of the Agreement? 
 No.  Singapore and Panama have not taken an y form of safeguard measures against each 
other before and after entry into force of the Agreement.  Government Procurement
 
 5. With respect to Paragraph 106 of the Factual Presentation (WT/REG227/1), could the 
Parties tell us about the effects of the Agreeme nt in the Government Procurement area?  In  WT/REG227/2 
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  other words, we would like to know if there ar e cases where an enterprise of one Party got 
government procurement in the market of the ot her Party before and after entry into force of 
the Agreement.  If that is the case, could the Pa rties give us details of such cases including the 
number of cases, amount of procurements and the subject of procurements?  Is there any trend 
of increase in procurements which enterprises of one Party got in the market of the other Party?  
 The Government Procurement chapter is orie nted to guaranteeing the respect for national 
treatment, non discrimination and transparency principles.  In practice, both Parties already recognize 
these principles and the non-discriminatory participa tion of any worldwide pr ovider to its government 
procurement market.  
 Singaporean enterprises may participate in any procurement carried out by the Panamanian 
government in a non-discriminatory basis.  Up to date, Panama has no data  of participation or 
adjudication to Singaporean enterprises of any procurement carried out by the Panamanian 
government.  In Singapore, government procurements  are decentralized such that the respective 
procuring entities procure their own supplies, hence the government does not track procurement from Panama.  The bulk tenders Singapore has are on IT and stationery items and these are not procured 
from Panama. 
 
Questions from the Delegation of the European Communities
 
 
~ Services ~ 
 
6. While, in previous FTAs, both Parties h ave excluded from their market access and 
national treatment commitments measures taken at  local level, it seems that this FTA covers, 
like in the GATS, measures taken by any level of government.  Could the Parties please 
confirm? 
 All levels of government are covered sin ce both Panama and Singapore have a central 
government system which includes local governments.    
7. Singapore has liberalized trade in services with EFTA countries on the basis of a 
positive list of commitments.  Liberalization of  trade in services between Singapore and Panama 
is based on negative lists of commitments.  Gi ven the differences between the two Agreements, 
the EC would like to ask to what extent Si ngapore's commitments under the Singapore-EFTA 
Free Trade Agreement go further than its co mmitments under the Singapore-Panama FTA and 
to what extent commitments under the latter go further than commitments under EFTA-
Singapore. 
 Singapore’s FTAs differ from one another in terms of architecture and commitments as they 
are negotiated with the aim of achieving a balanced  and satisfactory outcome for both Parties of the 
agreement.  In EFTA, Singapore has gone further in  terms of commitments, for example, in social 
services and land surveying services.  For Singapor e-Panama FTA, Singapore has gone further in 
terms of commitments, for example, in land surveying services and hospital services. 
 
8. According to Article 10.1, the Chapter on  cross-border supply of services covers GATS 
Mode 4.  Then paragraph 7 of Article 10.2 states that Annex 10A ( Movement of Business 
Persons ) contains supplementary provisions to this Chapter and provides for additional rights 
and obligations in relation to the movement of natural persons between the Parties, subject to 
any reservations taken in Annex I, II and III of Chapters 9 ( Investment ), 10 ( Cross-Border Trade 
in Services ) and Chapter 11 ( Financial Services ).  Annex 10 A mainly addresses the issue of 
intracorporate transfers.  Is it correct to interpret that the supply of services in Mode 4 by other WT/REG227/2 
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  categories of natural persons has been comple tely liberalized subject to the reservations 
contained in those Annexes?   
 Both Panama and Singapore took reservations on the supply of services by the presence of 
natural persons in Annex II of Ch apters 9 and 10, subject to the provisions in Annex 10A, which 
committed intra-corporate transferees under the FTA. 
 
Questions from the Delegation of the United States
 
 
National Treatment and Market Access for Goods  
 
9. Paragraph 19 discusses staging categories but do es not explicitly state how many staging 
categories are used.  Can the Parties please cl arify how many staging categories are used?  
 In the case of Panama, five staging categories are used for the progressive elimination of 
customs duties. Details on the staging categori es can be found in Annex 2.3 (Customs Duties 
Elimination Schedule) of the Agreement. 
 
10. Paragraph 22 notes that the Parties shall e liminate any existing customs processing fee 
on originating goods two years after entry into force of the Agreement.   
- Can new customs processing fees be adop ted within the two-year window if they 
are eliminated at the end of the two years?  
 
 Yes.  There is no provision in the Agreement that restricts Parties from adopting new customs 
processing fees within the two-year window, provided that they are eliminated for originating goods 
at the end of the two years. 
 
11. Paragraph 14 notes that the agreement came  into force on 24 July 2006.  However, 
paragraph 23 states that tariff elimination started on 1 July 2006.   
- Can the Parties clarify that tariff elimination began before the agreement came 
into force?  
 
 Annex 2.3 (Customs Duties Elimination Schedule) stated that the staging of tariff elimination 
would start from 1 July 2006. However, since the Agreement came into force after that date, tariff 
elimination only began when the Agreement entered into force on 24 July 2006. 
 
Telecommunications Services  
 12. As we understand from paragraph 90, Sin gapore has taken a non-conforming measure 
(NCM) with respect to foreign equity partic ipation in telecommunications operators in 
Singapore, limiting such participation to 74% total.  Singapore's law does not have such a 
restriction, and nor is it included in other FTAs.   Is this NCM moot, based on current law in Singapore? 
 The NCM is taken for consistency purposes, a nd was part of the negotiated outcome of the 
FTA.  We have committed similar foreign equity pa rticipation with some of our trading partners 
including India and Jordan. 
 
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