WORLD TRADE  
ORGANIZATION  WT/REG161/4 
24 January 2005 
 
 (05-0276) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN THE UNITED  STATES AND SINGAPORE 
 
SERVICES ASPECTS
 
 
Communication from the Parties  
 
 The following communication, dated 21 January 2 005, is being circulated at the request of the 
Delegations of the United States and Singapore.  
_______________ 
 
 
I. BACKGROUND INFORMATION ON THE AGREEMENT 
1. Membership And Dates Of Signature, Ratification And Entry Into Force. 
 The Agreement between the United States of America (United States) and the Republic of 
Singapore (Singapore) on the Establishment of a Fr ee Trade Area (Free Trade Agreement) was signed 
on May 6, 2003.  The Agreement entered into force on January 1, 2004. 
 
2. Type Of Agreement 
 In Article 1.1 of the Agreement, the Parties establish a free-trade area consistent with     
Article XXIV of the GATT 1994 and Article V of the GATS. 
 
3. Scope 
 The Agreement contains chapters addressing cross-border trade in services (chapter 8), 
investment (chapter 15), telecommunications services (chapter 9), financial services (chapter 10), and temporary entry of business persons (chapter 11).  The Agreement, including these chapters, can be 
found at www.ustr.gov
 or www.fta.gov.sg . 
 
 The Agreement has substantial services sector al coverage and provides for the absence or 
elimination of substantially all discrimination, thereby meeting GATS Article V (1) requirements.  
The Parties affirm that nothing in the Agreement seeks to increase the level of services restrictions 
vis-à-vis non-Members. 
 
 This is a “negative list” agreement, meani ng that all sectors are liberalized unless a Party 
takes a specific reservation (“Non-confor ming measure”) in the Agreement.   
  The Agreement covers the four modes of ser vices delivery established in Article I.2 of the 
GATS.  The chapter on cross-border trade in servi ces encompasses cross-border supply, consumption 
abroad and presence of natural persons (modes 1, 2 and 4) and the chapter on investment, rights for 
investors in manufacturing and services, including commercial presence (mode 3).  However, rights for financial services suppliers are provided in a separate financial services chapter that covers WT/REG161/4 
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 investment in regulated financial institutions and cross-border supply of financial services (modes 1, 
2, 3 and 4).  Market access for telecommunications is captured under the Chapters on investment and 
cross-border services.  The Chapter on telecommunications provides regulatory disciplines on access to and use of public telecom networks and other tel ecom issues.   Mode 4 is addressed in the Chapter 
on temporary entry of business persons.   
 
4. Trade Data 
 Statistical data on the evolution of trade in service between the United States and Singapore is 
presented in the Annex.   
 
II. PROVISIONS AFFECTING TRADE IN SERVICES 
1. Elimination Of Discriminatory Restrictions 
 This is a “negative list” agreement, meaning that all sectors are liberalized (e.g., financial 
services, computer and related services, telecommunications services, audiovisual services, 
professional services, construction and engineering, express delivery, tourism, distribution services, 
adult education and training, environmental services, energy services, and others)  unless a Party takes 
a specific reservation (“Non-conformi ng measure”) in the Agreement.   
  Each Party maintains a limited schedule of “non-conforming measures” to the investment and 
cross-border services chapters to which the provi sions on national treatment (Articles 15.4 , 8.3), 
most-favored-nation treatment (Articles 15.4, 8.4) lo cal presence (Article 8.6), market access (Article 
8.5), performance requirements (Article 15.8) or seni or management and boards of directors (Article 
15.9) do not apply.  Each Party maintains a li mited schedule of “non-conforming measures” to the 
financial services chapter to which the provisions on  national treatment (Article 10.2), most-favored-
nation treatment (Article 10.3), ma rket access (Article 10.4), cross- border (Article 10.5) or senior 
management and boards of directors (Article 10. 8) do not apply.  The cross-border services and 
investment non-conforming measures  can be found in relevant annex es to Chapters 8 and 15 (cross-
border services and investment).  Existing non-conf orming measures are set forth in one annex and a 
second annex provides very limited flexibility for sectors or sub-sectors for which new or more restrictive measures can be introduced.  The financ ial services non-conforming measures can be found 
in the relevant annex to Chapter 10 (financial services).    
 
 Even in the limited areas for which existing non-conforming measures are recorded, if either 
Party liberalizes a particular non-conforming m easure, that degree of liberalization becomes 
automatically bound for the purposes of the FTA.  
 Relating to elimination of discriminatory restrictions, Singapore agreed to phase-in improved 
access for U.S.-owned banks.  Singapore will lift its ban on new licenses for qualifying full banks 
(QFBs) (a bank that can supply wholesale, retail or both types of services) by July 1, 2005, and for 
wholesale banks, by January 1, 2007.  Singapore agr eed to allow U.S.-owned QFBs to offer their 
services at unlimited locations by January 1, 2006.  Singapore also agreed to allow U.S.-owned banks 
to negotiate with Singapore-owned banks for access to the latter’s ATM networks; for locally 
incorporated QFBs by July 1, 2006 and for QFB branches by January 1, 2008. 
 
2. Rules Of Origin 
 The Agreement includes a chapter on rules of origin (chapter 3), but the language in the 
Agreement is directed to trade in goods, not services. 
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 3. Standards/Recognition 
 The cross-border services chapter contains an article on recognition and an annex on 
professional services that relate to the possibility of mutual recognition.   
4. Safeguards  
 The agreement includes a chapter on safeguard measures (Chapter 7), but the language in the 
Agreement is directed to trade in goods, not services.  
5. Subsidies And State-Aid 
 The scope of the cross-border services chapter excludes subsidies or grants.  The investment 
chapter excludes subsidies or grants from the scope of many of the core obligations.  The financial 
services chapter includes subsidies or grants within  its scope although it excludes certain activities or 
services when not provided under a situation of competition. 
 
6. Government Procurement 
 Chapter 13 deals with government procurement.  As Singapore and the United States are both 
members of the WTO Agreement on Government Pr ocurement (GPA), the Government Procurement 
chapter builds on the GPA by incorporating a number  of its provisions and elaborating on certain 
provisions.  The chapter provides a co mprehensive set of rules that apply to government procurement, 
requiring national treatment of the other Part y’s goods, services and suppliers, and prohibiting 
discrimination against locally established suppliers on th e basis of foreign affiliation or ownership.  In 
addition, the Chapter expands market access between the Parties. 
 
7. Sector-Specific Provisions 
 The Agreement contains chapters on financ ial services and telecommunications services as 
noted above.   
 
 
III. GENERAL PROVISIONS OF THE AGREEMENT 
1. Exceptions And Reservations 
 Chapter 21 of the Agreement addresses excepti ons.  The Free Trade Agreement does nothing 
to require any Party to provide in formation contrary to its essential security interests; or to prevent 
any Party from taking necessary actions to protect its security interests.  The Agreement incorporates 
GATT 1994 Article XX and GATS Artic le XIV for various chapters. 
   The United States and Singapore include r eservations (“non-conforming measures”) to the 
cross-border services, investment and financial servi ces chapters as noted in Section III above.   
 
2. Accession 
 Accession is addressed in Chapter 21, the General and Final Provisions Chapter. The 
Agreement allows for non-Parties to accede to it subject to such terms and conditions as may be 
agreed between the non-Parties and the Parties,  and following approval in accordance with the 
applicable legal procedures of each country. 
 
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 3. Dispute Settlement Procedures 
 Chapter 20 addresses administrative arrangements and dispute settlement. The Free Trade 
Agreement sets out detailed procedures for a tr ansparent government-to-government dispute 
resolution process, and provides that the Parties shall attempt through coope ration and consultations 
to arrive at a mutually satisfactory resolution of any matter.  Disputes arising under both the 
agreement and the WTO generally may be settled in e ither forum at the discretion of the complaining 
government.    The agreement places priority on reaching an  amicable settlement. The Joint Committee 
created under the agreement (see item 5 below) is th e initial forum for resolution of disputes.  If the 
Joint Committee is unable to resolve a dispute with in a specified period (generally 60 days), the 
complaining Party may request the establishment of  a panel.  The Parties will establish rules of 
procedure that will provide for the protection of confidential information, open hearings and public 
release of submissions, an opportunity for th e panel to accept submissions from nongovernmental 
entities in the Parties’ territories.   
 
 In disputes where the panel has found that a Party has not conformed with its obligations 
under this Agreement or that a Party’s measure is  inconsistent with the Agreement and causing 
nullification or impairment of a benefit under speci fic Chapters, if the Parties are unable to reach 
agreement on a resolution following receipt of the final report of the panel, the Parties shall enter into 
negotiations to develop mutually acceptable compensation.  If the Parties are unable to agree on 
compensation, or if the complaining Party consider s that the defending Party has failed to implement 
the agreed resolution, the complaining Party ma y provide notice that it intends to suspend the 
application of benefits of equivalent effect. 
  Under the rules for labor and environment disput es, if a panel determines that a Party has not 
conformed to its obligations under specific provi sions and the Parties are unable to agree on a 
resolution or the complaining Party considers that the other Party has failed to implement the agreed 
resolution, the complaining Party may request that  the panel be reconvened to determine the amount 
of an annual monetary assessment to be imposed on the other Party.  
4. Relation With Other Trade Agreements 
 The Parties reaffirm their existing rights and obligations with respect to each other under 
existing bilateral and multilateral agreements to which both Parties are party, including the WTO 
Agreement.  The Parties reserve the right to a dopt or maintain measures that accord preferential 
treatment pursuant to trade agreements in force or  signed prior to entry into force of the FTA. 
 5. Institutional Framework 
 The Agreement establishes a Joint Committee th at will supervise the implementation of the 
agreement and assist in the resolution of disputes that may arise between the parties regarding its 
interpretation or application.  The Join t Committee will meet at least annually. 
   IV. OTHER 
Transparency
 
  Chapter 19 addresses transparency issues.  Th is Chapter sets out a number of requirements 
designed to foster openness, transparency and fa irness in the adoption and application of the 
administrative measures covered by the agreement.  For example, the Chapter requires that each  WT/REG161/4 
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 government must promptly publish or make av ailable all laws, regulations, procedures and 
administrative rulings of general application con cerning matters covered by the agreement, and to 
extent possible also provide interested persons  a reasonable opportunity to comment on them.  
Furthermore, a Party must provide information upon request from the other party concerning any 
action that it has taken or intends to take.  Each government must wherever possible, provide 
reasonable notice of proceedings to affected pers ons of the other Party and afford such persons 
reasonable opportunity to present facts and argu ments.  In addition to these Agreement-wide 
procedures, the services sector benefits from additio nal transparency obligations.  For example, each 
Government must provide a summary of comments received on draft regulations and must allow time 
between publishing a final regulation and its entry-into-force. 
 
Anti-competitive Behavior.  
  Chapter 12 of the Agreement addresses an ti-competitive business conduct.  Under the 
Agreement, each Party agrees to est ablish or maintain an authority responsible for enforcement of 
measures to proscribe anticompetitive business. 
  Each Party retains the right to designate pr ivately-owned and government-owned monopolies.  
The Parties will ensure that monopolies so desi gnated will operate on the basis of commercial 
considerations and provide non- discriminatory treatment to firms of the other Party.  
 
 Both Parties agree to ensure that their govern ment enterprises act in a manner that is not 
inconsistent with the Parties’ obligations under th e Agreement and adhere to the principle of non-
discrimination.     The Parties agree to provisions to promote transparency in their competition policies.  
  
  
ANNEX I:  U.S.-SINGAPORE BILATERAL TRADE 
  I. HISTORICAL TRADE DATA 
U.S. Services Trade with Singapore (in billions of dollars), 1994, 1998-2003 
 
  
1994  
1998  
1999  
2000  
2001  
2002  
2003 
 
Balance  
1.4  
2.0  
2.8  
3.7  
4.0  
3.7  
4.6 
 Exports  
2.6  
3.8  
5.1  
6.1  
5.9  
5.8  
6.9 
 Imports  
1.2  
1.9  
2.4  
2.4  
1.9  
2.1  
2.3 
 *NOTE: Refers to private services trade not includi ng U.S. military sales, direct defense expenditures, 
and other miscellaneous U.S. government services. 
 
  
II. TRADE BALANCE 
• The United States has a services trade surplus  of $4.6 billion with Singapore in 2003. 
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 III. EXPORTS 
• U.S. exports of private commercial services
* (i.e., excluding military and 
government) to Singapore were $6.9 billion in 2003 , 17.6% ($1.0 billion) greater than 
2002 and 161% ($4.3 billion) greater than 1994 levels.  The other transportation, and 
other private services (financial services, and business, professional, and technical 
services) categories accounted for most of U.S. exports in 2003. 
 
IV. IMPORTS 
• U.S. imports of private commercial services * (i.e., excluding military and government) 
were $2.3 billion in 2003 , up 12% ($247 million) from 2002, and up 98% ($1.1 billion) from 
1994 level.  Other transportation category accounted for most of U.S. services imports from Singapore. 
 
 
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