WORLD  TRADE  
ORGANIZATION  WT/TPR/S/202/Rev.1 
26 September 2008  
 
(08-4542) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
SINGAPORE 
 
Revision 
 
 
 
 
This report, prepared for the fifth Trade Policy Review of Singapore, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Singapore on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed to 
Mario Kakabadse (tel:  022 739 5172). 
 
Document WT/TPR/G/202 contains the policy statement submitted by 
Singapore. 
 
 
 
 
 Singapore WT/TPR/S/202/Rev.1 
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CONTENTS 
 
  Page 
SUMMARY OBSERVATIONS vii 
 (1) E CONOMIC ENVIRONMENT  vii 
 (2) F RAMEWORK FOR TRADE AND INVESTMENT POLICY  viii 
 (3) T RADE MEASURES  viii 
 (4) O THER TRADE -RELATED POLICIES  ix 
 (5) S ECTORAL POLICIES  ix 
 (6) O UTLOOK  x 
I. ECONOMIC ENVIRONMENT 1 
 (1) I NTRODUCTION  1 
 (2) R ECENT ECONOMIC PERFORMANCE  1 
 (3) M ACROECONOMIC POLICIES  6 
 (i) Monetary and exchange rate policy 6 
 (ii) Fiscal policy 7 
 (iii) National wage policy 10 
 (4) S TRUCTURAL POLICIES  10 
 (5) D EVELOPMENTS IN TRADE  11 
 (i) Composition of merchandise trade 11 
 (ii) Direction of merchandise trade 14 
 (iii) Composition of trade in services 14 
 (6) D EVELOPMENTS IN FOREIGN DIRECT INVESTMENT (FDI) 15 
 (7) O UTLOOK  16 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  18 
 (1) I NTRODUCTION  18 
 (2) G ENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  18 
 (3) D EVELOPMENT AND ADMINISTRATION OF TRADE POLICY  19 
 (i) Agencies involved in trade policy implementation 19 
 (ii) Transparency 21 
 (iii) Main trade legislation 24 
 (4) T RADE AGREEMENTS AND ARRANGEMENTS  24 
 (i) World Trade Organization 24 
 (ii) Regional agreements 25  (iii) Bilateral agreements 28 
 (iv) Other preferences 31 
 (5) F
OREIGN INVESTMENT REGIME  31 
 (i) Overview 31 
 (ii) Incentives 32 
 (iii) International agreements 32 
 (6) A ID FOR TRADE  33 
 WT/TPR/S/202/Rev.1 Trade Policy Review 
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  Page 
III. TRADE POLICIES AND PRACTICES BY MEASURE 34 
 (1) I NTRODUCTION  34 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  35 
 (i) Customs procedures 35 
 (ii) Tariffs 35 
 (iii) Other charges affecting imports 39  (iv) Customs valuation and rules of origin 39 
 (v) Import prohibitions, restrictions, and licensing 41 
 (vi) Contingency measures 42  (vii) Standards and sanitary and phytosanitary requirements 43 
 (viii) Government procurement 48 
 (ix) State trading 50 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  50 
 (i) Procedures 50 
 (ii) Export taxes and other charges 51  (iii) Export prohibitions, re strictions, and licensing 51 
 (iv) Export assistance 51 
 (v) Free-trade zones 52 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  53 
 (i) Framework for businesses 53  (ii) Industrial policy 53 
 (iii) Taxation 60 
 (iv) Competition policy 64  (v) Corporate governance 65 
 (vi) Intellectual property rights 66 
IV. TRADE POLICIES BY SECTOR  73 
 (1) I
NTRODUCTION  73 
 (2) A GRICULTURE  74 
 (3) M ANUFACTURING  74 
 (i) Overview 74 
 (ii) Key sectoral policies 76 
 (4) E NERGY AND WATER  77 
 (i) Electricity 78 
 (ii) Gas 79 
 (iii) Water 80 
 (5) S ERVICES  80 
 (i) Overview 80 
 (ii) Commitments under the GA TS and bilateral agreements 81 
 (iii) Banking and other financial services 82 
 (iv) Communications 90  (v) Transport 94 
 (vi) Tourism services 99 
 (vii) Professional services 101 
REFERENCES   105 
APPENDIX TABLES  109 
 Singapore WT/TPR/S/202/Rev.1 
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CHARTS 
  Page 
 
I. ECONOMIC ENVIRONMENT  
I.1 Product composition of merchandise trade, 2003 and 2006 12 
I.2 Direction of merchandise trade, 2003 and 2006 13  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 Share of bound tariff lines, by HS section, 2005 36 
III.2 Average bound tariff rates, by HS section, 2005 37 
III.3 Temasek portfolio, 2007 58 III.4 Summary of tax incentives, 2006 63 
 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Selected macroeconomi c indicators, 2003-07 2 
I.2 Basic economic indicators, 2003-07 5 
I.3 Fiscal balance, 2004-07 8 
I.4 Trade in services, 2003-07 14  
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 II.1 Ministerial responsibility for trade-related issues, 2007 20 
II.2 Profile of Temasek and GIC, 2007 21 
II.3 Singapore's bilateral free-trade agreements, 30 September 2007 28 
 
III TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 Applied and bound MFN tariffs, 2007 38 
III.2 Singapore's preferential rules of origin, 2007 40 
III.3 Key indicators for quality and standards, 2004-07 44 III.4 Value of the government procurement market, 2004-07 48 
III.5 Major Temasek shareholdings, 2007 58 
III.6 Operating revenue, 2003-06 61 
III.7 Legislation on protection of intellectual property rights (amendments since 2004 
 to the laws and regulations notified to the WTO) 66 III.8 IPRB raids, 2002-07 72 
 
IV. TRADE POLICIES BY SECTOR  
IV.1 Employment, output and value-added manufacturing by industry cluster, 2003 and 2007 75 
IV.2 Legislative amendments  concerning electricity, ga s, and water since 2004 78 
IV.3 Amendments to financial services legislation, since 2004 83 
IV.4 Structure and performance ratios of the banking sector, 2003-07 86 
IV.5 Main features of various shipping incentive schemes 97  
 
  
 
 WT/TPR/S/202/Rev.1 Trade Policy Review 
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APPENDIX TABLES 
  Page 
 
I. ECONOMIC ENVIRONMENT  
AI.1 Source of productivity growth, 2003-07 111 
AI.2 Inflows of foreign direct investment by country and region, 2003-07 111 AI.3 Stock of foreign direct investment by country and region, 2003-06 112 
AI.4 Inflows of foreign direct investment by economic activity, 2003-07 113 
AI.5 Stock of foreign direct investment by economic activity, 2003-06 114  
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
AII.1 Main trade-related laws, September 2007 115 
AII.2 Status of selected notifications to the WTO, January 2004 to January 2008 116  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
AIII.1 GST relief schemes, 2007 118 AIII.2 Import prohibitions by product, 2007 119 
AIII.3 Import prohibitions and restrictions by country, 2007 120 
AIII.4 Products covered by automatic and non-automatic import licensing,  status November 2006 121 
AIII.5 Legislation on SPS regulati ons and labelling, since 2004 123 
AIII.6 Exports subject to controls, September 2007 124 AIII.7 Tax incentives, 2007 125 
AIII.8 Non-tax assistance for industrial development (administered by EDB and SPRING), 2007 134 
 Singapore WT/TPR/S/202/Rev.1 
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SUMMARY OBSERVATIONS 
(1) ECONOMIC ENVIRONMENT  
1. Singapore's economy, in terms of 
international trade and foreign investment 
remains one of the most open, and thus 
competitive, in the world.  With a few exceptions, tariffs are zero, total merchandise trade is nearly four times GDP and inflows of foreign direct investment are substantial, at 
about one-sixth of GDP in 2007.  Although its 
high degree of openness leaves Singapore vulnerable to periodic external shocks, the economy's flexibility has enabled it to adjust rapidly to these shocks by constantly improving productivity, a nd thus international 
competitiveness, which in turn contributes to 
economic growth and higher living standards.   
2. Since 2004, Singapore's annual real 
GDP growth has averaged 7.9% and GDP per capita increased from US$26,198 to 
US$35,163 in 2007, underpinned by sound 
macroeconomic policies.  Inflation has been low for the most part, averaging 1.3% annually;  inflationary pressures, however, have risen since the second half of 2007, reflecting both domestic cost pressures and 
rising international prices, with the inflation 
rate hitting over 6% by early 2008.  In response, the Monetary Authority of Singapore (MAS) tightened its monetary policy, allowing a significant appreciation of the Singapore 
currency in order to curb the cost of imported 
food and energy.  Unemployment fell from 3.4% in 2004 to 2.1% in 2007, reflecting broad-based employment generation.  National saving continued to exceed domestic 
investment by an average of 21% of GDP  
during the period under review, and  the counterparts of the excess saving, which has been invested abroad, are persistently large 
current account surpluses.  Singapore's official reserves reached nearly US$163 billion in 
2007, equivalent to about six months of 
imports of goods and services. 
3. Although average incomes have risen, 
the incomes of some people have risen faster than those of others, reflecting higher wage increases for skilled and well-educated 
workers.  Singaporeans have generally benefited from globalization, but some older and less educated workers remain vulnerable 
to structural unemployment as the economy 
restructures and manufacturing and services move up the value-added ladder.   
4. Singapore's external competitiveness 
has been tested by the rise of lower-cost 
economies in the region, notably China and 
India.  Labour, capital, and total factor productivity growth held up relatively well during most of the review period, although there appears to have been a marked slowdown in 2007.  Singapore has continued 
to undertake structural reforms, focusing on 
lowering costs, increasing wage and labour market flexibility, further liberalizing the banking, telecom and utility sectors.  Singapore is also negotiating several trade and 
investment agreements with major trading 
partners.  To lower business costs, the Government has progressively reduced the corporate tax rate to 18% and the top rate of personal income tax to 20%, and will keep taxes low to attract investment and talent and 
reward enterprise.  Cuts in income taxes have 
been offset by a rise in 2007 in the goods and services tax (GST) from 5% to 7%, reflecting a continuing shift to indirect from direct taxes.   
5. The longer-run challenge of moving 
Singapore into higher-value-added 
manufacturing and services is being addressed principally through incentives to attract investment in targeted areas, through further regulatory reform and through investment in 
infrastructure and R&D.  By focusing on R&D 
and innovation, Singapore's development strategy has continued to shift from emphasis on using technology to creating it.  Gross expenditure on R&D, mainly driven by the private sector, increased from 1.9% of GDP in 
2000 to 2.4% in 2005 and is planned to 
increase to 3% by 2010. WT/TPR/S/202/Rev.1 Trade Policy Review 
Page viii 
 
 
(2) FRAMEWORK FOR TRADE AND 
INVESTMENT POLICY  
6. The main responsibility for trade 
policy formulation and implementation in 
Singapore remains with the Ministry of Trade 
and Industry (MTI), which deals with WTO issues and international trade negotiations, Singapore participates in the Association of Southeast Asian Nations (ASEAN) and the 
Asia-Pacific Economic  Cooperation (APEC) 
forum and also has bilateral trade and investment agreements with countries in various regions of the world.  Singapore grants at least MFN treatment to all its trading partners.  Singapore views the WTO as at the 
core of its trade policy strategy but also 
considers that trade liberalization efforts undertaken bilaterally and in regional fora can accelerate the momentum towards trade liberalization and thus form building blocks 
for the multilateral trading system. 
7. Accordingly, since 2004, free-trade 
agreements (FTAs) with India, Jordan, Korea, Panama, and Brunei, Chile, and New Zealand (in the Trans-Pacific Strategic Economic Partnership Agreement) have entered into 
force, and Singapore is currently in FTA 
negotiations with Canada, China, Mexico, the Gulf Cooperation Council, Pakistan, and Ukraine.  While Singapore has almost no applied tariffs, it has offered in the FTAs to 
negotiate preferential treatment for partners, 
ranging from binding all its tariff lines at zero, access to service industries in Singapore, mutual recognition of standards, enhanced investment protection disciplines, greater 
commitment to protect intellectual property 
rights, and elimination of anti-competitive practices. 
8. Other notable developments include 
the enactment of an economy-wide competition law, which entered into effect in 
2005 and the establishment in the same year of 
the Competition Commission of Singapore.  Institutional transparency  has been enhanced 
in significant ways.  For example, since 2004 the consolidated group financial statements of 
Temasek Holdings, whic h owns and manages the Government's direct investments both 
locally and abroad, are published annually on the company's website;  in addition, through improvements in e-government, draft 
legislation or guidelines are issued 
increasingly for public consultation, usually through the websites of Ministries and statutory boards.  
9. Aided by its open FDI policies, 
Singapore has continued to evolve into a base 
for multinational companies to engage in high-end manufacturing and product development, and to coordinate regional 
procurement, production, marketing, and distribution operations.  In recognition of the 
important contribution of foreign investment 
to the development of the economy, the few restrictions on inward foreign investment are limited to broadcasting, the domestic news media, retail banki ng, legal and other 
professional services, and property ownership.  
(3) T
RADE MEASURES  
10. Due to its location and developed port 
facilities, Singapore's merchandise exports include a large volume of entrepôt trade with 47% of exports consisti ng of re-exports.  Since 
2004, Singapore has enhanced its position as a 
global trade and trans-shipment hub by improving the TradeNet system, an electronic single window for customs declarations, to further simplify the regulatory processes for 
importing and exporting.  
11. Singapore's import regime has 
relatively few border measures.  Singapore's applied MFN tariff is zero, apart from six lines for alcoholic beverages, which are subject to 
specific rates.  Singapore has bound some 70% 
of its tariff lines, which is unchanged from its previous Review, at an average rate of 6.9%.  The gap between applied and bound MFN rates and the absence of bindings for 30.4% of tariff lines could create a degree of 
unpredictability for traders in the sense that 
there is scope for the authorities to raise tariffs;  however, applied tariffs have not been increased during the review period.   Singapore WT/TPR/S/202/Rev.1 
 Page ix 
 
 
12. Singapore's import restrictions are 
based mainly on environmental, health, and public security concerns, with the exception of rice, which is subject to import licensing to 
ensure food security and price stability.  
Security, health, and environmental concerns also underlie Singapore's export restrictions and mainly involve endangered species under the CITES Convention, arms, explosives, 
chemicals, and radioactive materials.  
Singapore makes very limited use of contingency measures;  it did not notify any anti-dumping measures in the review period and has no legislation on safeguards.  Singapore's policy of basing its standards on 
international norms has continued, with around 
80% of alignable standards aligned with international standards.  There have been no major changes to the re gulatory framework for 
sanitary and phytosanitary measures, although 
several laws have been updated.  Regarding 
government procurement, Singapore provides additional market access concessions to its trading partners under most of its bilateral FTAs negotiated during the review period.   
(4) O
THER TRADE -RELATED POLICIES  
13. In the medium term, the Government 
is likely to continue to focus on maintaining Singapore's appeal as a destination for FDI.  It has reduced the statutory corporate tax rate and continues to offer tax incentives in 
industries that it is trying to nurture, such as 
semiconductors, IT, biotechnology and genetic engineering and services.  The cost effectiveness of the many tax and non-tax incentives on offer is, however, open to 
question.   
14. In addition to tax measures, other 
instruments of Singapore's evolving industrial policy include:  first, state ownership of land ensures that the Government continues to have a significant degree of control over the release 
and thus the price of industrial land;  second, 
with their history of active implementation of Singapore's industrial policy, statutory boards, and the financial assistance they provide, are key players in the development of 
knowledge-based sector s and value-added activities considered crucial for sustaining the 
long-term growth of Singapore in the global economy;  and third, Singapore's government-linked companies (GLCs, largely consisting of 
enterprises in which Temasek holds shares), 
which although still pervasive in many sectors of the economy, now seem to operate more on a commercial basis and less as a strategic tool of industrial policy.  During the period under 
review, the trend towards GLCs operating 
increasingly on the same basis as private companies has been re inforced by further 
divestments by Temasek, by enhanced corporate governance regulation (which has imposed more stringent disciplines for listed 
GLCs), and by the enactment of an 
economy-wide competition law, which applies in principle to all enterprises, including GLCs. 
15. In order to maintain and develop a 
robust intellectual property (IP) regime to help 
foster  knowledge-based industries, attract 
foreign investment in knowledge-based industries, and meet commitments under its bilateral free-trade agreements and international treaties, significant improvements have been made in legislation, covering 
copyrights, patents, registered designs, trade 
marks, and plant varieties.  
(5) S
ECTORAL POLICIES  
16. The economy continues to be 
dominated by services (excluding utilities), 
accounting for around 66% of GDP in 2007, 
followed by manufacturing, with a share of about 24% of GDP.  The Government believes that manufacturing should remain one of the twin engines of growth and would like to see 
its share at 20-25% of GDP.  The share of 
employment in the manufacturing sector remains broadly constant at slightly over 20%.  Singapore has continued to encourage manufacturing to move into high-value-added activities, primarily through the creation of 
supporting infrastructure and incentives.  The 
sectoral clusters in manufacturing currently encouraged are:  electronics, chemicals, biomedical sciences (comprising the pharmaceutical, medical technology, 
biotechnology, and healthcare service WT/TPR/S/202/Rev.1 Trade Policy Review 
Page x 
 
 
industries), and engineering (including 
precision and transport engineering).  
17. Electronics and chemicals form the 
main manufacturing activities in terms of 
output, with electronics accounting for a large 
share of total merchandise exports.  Competition from low-cost producers in the region together with Singapore's rising labour costs have resulted in a gradual shift away 
from labour-intensive to high-value-added 
capital-intensive activities by deepening Singapore's technology base and strengthening knowledge-based manufacturing (and services) clusters.  Incentives are provided to encourage innovation by firms operating in 
Singapore.  
18. The economy is largely open as far as 
trade in goods is concerned and has become more open for utilities and services.  In the electricity sector, state-owned companies 
continue to dominate, although restructuring 
and privatization has begun with the three leading power-generation companies due to be divested by Temasek in 2008/09.  Deregulation has continued in the gas sector with the approval of non-discriminatory terms 
and conditions for gas transportation 
throughout the Singapore network;   the supply of water is centrally managed by the Government at price levels considered to be reflective of the scarcity of water as a 
resource.  A significant degree of liberalization 
in financial, telecoms, and professional services has been achieved since the previous Review partly as a result of several bilateral free-trade agreements.   
19. In banking, the liberalization measures 
that have encouraged greater participation from foreign banks have been strengthened by improved supervisory and corporate governance frameworks in the form of new and amended legisl ation regarding, inter alia,  
the Banking Act, Deposit Insurance Act, 
Securities and Futures Act, Financial Advisers Act, and Trust Companies Act.  Singapore has also evolved into a major regional asset management centre, attracting well recognized 
firms.   20. As a result of liberalization, the 
number of telecommunication service providers has increased significantly, with over 600 telecom licences awarded, albeit 
mainly to service-based operators.  The postal 
sector was liberalized in April 2007, ending a 15-year monopoly in the basic mail services market by SingPost.  
21. In transport services, the Government 
has put in place several long- and short-term 
incentives to encourage growth in the sector, with a view to making Singapore a leading maritime and aviation hub in Asia.  A significant development in the tourism sector was the 2005 decision by the Government to 
abolish its long-standing prohibition of 
gambling and allow casinos in Singapore, in an attempt to increase visitor arrivals and bolster economic growth;  relevant legislation was passed in 2006 and will provide the legal 
framework for the operation of two large 
casinos, as the main components in two integrated resorts, which are due to open in 2009/10.  Singapore is continuing to build up the health services sector, particularly to attract patients from abroad, and has increased 
market access for certain kinds of foreign 
professionals, notably lawyers.   
(6) O
UTLOOK  
22. The Government forecasts the 
Singapore economy to grow by between 4% 
and 6% in 2008 on the assumption that 
external economic conditions will weaken compared with 2007.  While economic growth is expected to moderate, inflationary pressures stemming from external sources, such as 
higher commodity prices as well as domestic 
conditions including a tig ht labour market and 
higher wages and rental costs, and one-off factors like the hike in GST, are expected to push inflation up to 5%-6% for 2008 as a whole.  
23. No fundamental changes to monetary 
policy are expected;  the policy stance remains supportive of economic growth while ensuring price stability over the medium term.  However, the move in April 2008 by the MAS Singapore WT/TPR/S/202/Rev.1 
 Page xi 
 
 
to allow the nominal effective exchange rate of 
the Singapore dollar to appreciate might touch on external competitiven ess unless this can be 
offset by improved productivity, whose growth 
has been falling recently.  However, the 
authorities consider that the stronger exchange rate will help rein in cost pressures at the industry level, as derived demand for factor resources in the economy eases, thereby 
moderating inflationary pressures in the 
economy.   
24. In the longer term, as a city-state of 
around 4.5 million people, which is heavily dependent on trade in goods and services, Singapore needs to rely more on domestic 
consumption as a source of growth to help 
balance fluctuations in external demand and thus reduce its vulnerability to external shocks, which Singapore has tried to mitigate by diversification across export markets and sectors.  In this regard, the Government seems 
to be planning for a significant increase in population over the long term and has revised upwards its population forecast to 6.5 million 
by the middle of the century, to be achieved 
partly through increased immigration.    
25. Among the social challenges facing 
Singapore, the demographic trends of falling fertility rates and rising life expectancy are 
resulting in a rapidly ageing population, which 
could contribute to an eventual fall in Singaporeans' overall propensity to save, insofar as a growing number of retirees rely increasingly on their savings (rather than income) to finance consumption.  The 
Government has been helping Singaporeans to 
prepare financially for retirement through long-term and continuing reforms in policies pertaining to employment, training, retirement savings, housing, and health.