RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/202 
9 June 2008  
 
(08-2669) 
Trade Policy Review Body Original: English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
SINGAPORE 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Singapore is attached. 
 
 
 
Note: This report is subject to restricted ci rculation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Singapore. Singapore WT/TPR/G/202 
 Page 3 
 
 
CONTENTS  
 
 
  Page 
 
I. ECONOMIC PERFORMANCE AND OUTLOOK 5 II. ECONOMIC POLICIES AND REFORMS 6 
III. TRADE POLICIES 7 
IV. COMPETITION AND LIBE RALISATION POLICIES 9 
V. DOHA DEVELOPMENT AGENDA 10 
 
  Singapore WT/TPR/G/202 
 Page 5 
 
 
 I. ECONOMIC PERFORMANCE AND OUTLOOK 
1. This is the fifth Trade Policy Review of Singa pore by the World Trade Organisation (WTO).  
In the period under review (2004-2007), Singapore achieved strong economic growth, and continued 
to liberalise its economy and improve its compe titiveness, while maintaini ng prudent macroeconomic 
policies. 
2. GDP Growth . The Singapore economy is one of the fastest growing in Asia.  Gross Domestic 
Product (GDP) in real terms grew by 8% per annum on average during 2004-2007, led by the 
financial services and manufacturing sectors.  In 2007, the economy expanded by 7.7%. 
3. Sectoral Performance . Investments in manufacturing  have been exceptionally strong in 
recent years.  The manufacturing sector attracted S$16.1 billion of investment commitments in 2007, 
nearly twice the S$8.3 billion committed in 2004.  Th ese were mainly in the chemicals and electronics 
clusters.  The stock of direct investment abroad by Singapore-based companies rose from 
S$197 billion in 2005 to S$210 billion in 2006.   
4. The financial services  sector has been a stellar performer in recent years, posting growth of 
17% in 2007.  The fund management industry in pa rticular posted firm gains, reflecting in part 
growing investor interest in Asian equ ities and rising affluence in the region. 
5. Employment . The strong economy has supported robust employment growth.  A total number 
of 596,000 jobs were created during 2004-2007.  Total employment creation in 2007 was a record 
high of 235,000.  The unemployment rate in 2007 was 2.1%, the lowest level seen in a decade.  
Singapore was one of the few countries in the world which achieved effective full employment status 
last year. 
6. Inflation . Rapid economic growth has been achiev ed against a backdrop of relative price 
stability.  The consumer price index (CPI) has risen on average by 1.2% per annum during 2004-2007.  
However, CPI inflation began to pick up in the sec ond half of 2007, bringing the average rate for the 
year to 2.1%.  This has reflected a confluence of  external and domestic factors.  The escalation in 
global oil, food, and other commodity prices has fe d into domestic prices of food and oil-related 
items.  Domestic factors like the in crease in the Goods and Services Tax also contributed to a once-off 
increase in the inflation rate. 
7. Outlook . The outlook for 2008 is for slower growth and higher inflation, reflecting in large 
part developments in the US economy and global  food and energy prices respectively.  Under a 
central scenario of a mild US recession and a rec overy towards the end of the year, Singapore's GDP 
growth is expected to moderate to 4.0-6.0%.  Th is would be in line with the economy's underlying 
potential rate of growth over the medium term a nd help to relieve incipient cost pressures.   
8. CPI inflation is forecast at 4.5-5.5% over 2008.   Consumer prices have increased by 6.6% in 
the first quarter, as higher food and energy prices con tinue to feed into the economy.  Business costs 
have also increased on account of higher wages and rentals amidst tighter conditions in the labour and 
commercial property markets, respectively.  While CPI inflation should moderate towards the end of 
the year, a quick return to the lo w inflation rates seen in recent years is unlikely given structural 
factors underpinning global food and energy prices. WT/TPR/G/202 Trade Policy Review 
Page 6 
 
 
 II. ECONOMIC POLICIES AND REFORMS 
9. Besides a favourable external environment, sound economic policies and reforms in recent 
years have played an important role in Singa pore's strong economic perf ormance during the last 
four years.  As an open economy, Singapore has not been spared the challenges of globalisation, 
namely strong competition from low-cost competitors , the transmission of external demand and price 
shocks into the domestic economy, and increa sing wage dispersion and income inequality.  
Singapore's response has been to maintain a stab le and conducive macroe conomic environment, 
transit to higher value activities and upgrade work ers' skills, capitalise on opportunities in new growth 
industries, position the economy as a services hub, invest in research and development (R&D), 
restructure the social security system, and enhan ce incentive compatible social safety nets.  These 
reforms have sharpened Singapore's competitive ed ge and positioned it well to face the challenges 
posed by globalisation and seize its opportunities. 
10. Singapore remains one of the world's freest economies .  It has been ranked the most 
globalised country in the world by Foreign Policy fo r the fourth time in seven years and the world's 
second freest economy by the Heritage Foundation for the thirteenth consecutive year.   
11. Singapore has consistently ranked among the world's most competitive economies .  Singapore 
was rated the world's second most competitiv e economy by the World Competitiveness Yearbook 
2007 and the seventh most competitive economy by the Global Competitiveness Report 2007-2008.  
In Asia, Singapore remains the most competitive economy.   
12. Fiscal Policy . The focus of fiscal policy has been on restructuring the tax system away from 
direct to indirect taxation, investing in economic  infrastructure and R&D, and enhancing expenditure 
in education, healthcare, and social support, while maintaining fiscal prudence and sustainability.  The 
corporate income tax has been reduced from 22% in Financial Year (FY) 2004 to 18% in FY2007.  
The tax on goods and services has risen from 5% to  7%.  The Government's  overall budget balance 
during 2004-2007 was, on average, in surplus, at 0. 84% of GDP.  A surplus of S$6.4 billion (2.7% of 
GDP) is expected for FY2007, reflecting healthy ta x revenues on the back of a strong economy and 
property market. 
13. Monetary Policy .  Monetary policy in Singapore is centr ed on the exchange rate. Given the 
small and open nature of Singapore's economy, the ex change rate exerts a stronger influence than 
interest rates on inflation and economic activity.  Over the past few years, Singapore has adopted the policy of a modest and gradual appreciation of th e Singapore dollar, which has helped to mitigate 
inflationary pressures.  At the most recent monetary  policy review in April, the exchange rate policy 
band was shifted upward to help mode rate inflation, while providing support for sustainable growth in 
the economy.   
14. Economic Restructuring . Singapore continues to focus on developing higher value, 
knowledge-intensive industries, in order to mainta in its edge as a leading hub for enterprise and 
innovation.  With this move towards diverse a nd higher levels of innova tion and technology, a key 
goal is to ensure that the workfo rce has the ability to support such activities.  Good jobs increasingly 
tend to be knowledge-intensive, and one of Singapore's areas of focus going forward will be 
continuous education, training, a nd re-training – to equip skilled wo rkers with new capabilities so that 
they can better adapt to chang es to the economic landscape.  
15. 
New Growth Areas . The 2003 Economic Review Committee recommended remaking 
Singapore as a globalised, entrepreneurial, and di versified economy.  Three new areas have been Singapore WT/TPR/G/202 
 Page 7 
 
 
 identified for the future: natural resources; new te chnology; and clean energy.  The early signs are 
good.  For example, international companies are investing in the set-up of a biodiesel plant and a silicon solar cell manufacturing plant.  One of the world’s largest manufacturers of wind turbines is 
slated to set up its Asia-Pacific HQ in Singapore. 
16. Services Hub .  In services, Singapore aims to build on its existing strengths in financial and 
business services, transportation and logistics, and tourism.  It is also positioning itself as a hub for arbitration and philanthropy in Asia.  Singapore is  well-placed to be the location of choice for 
companies across the region seeking a convenient, im partial and neutral place for resolution of any 
commercial disputes arising from their cross border op erations.  Singapore is also positioning itself as 
a centre for multinational companies establishing charitable foundations and seeking to extend their 
philanthropic reach into Asia. 
17. Research & Development .  The current Science and Technology (S&T) Plan 2010 focuses on 
creating peaks of research excellence to support economic development, nurturing local talent, 
recruiting global talent, promoting more private sector R&D, and strengthening the linkages between 
R&D and industry. Its S$7.5 billion budget includ es S$5.4 billion to our national research agency, 
Agency for Science, Technology  and Research (A*STAR) to drive public sector R&D, and 
S$2.1 billion to the Economic Development Board to promote private sector R&D. 
18. Central Provident Fund (CPF) Reforms . To help Singaporeans improve their retirement 
adequacy and work longer, key changes were intr oduced in 2007.  First, to help Singaporeans work 
longer, there are plans to institute re-employment le gislation by 2012, requiring employers to offer re-
employment to workers so that they can work beyo nd the age of 62.  Second, the CPF interest rate 
structure has been enhanced to improve the returns on savings so that retirement funds can build up at 
a faster rate.  Third, the draw-down age for retirees will be gradually raised from 62 currently to 65 so that CPF savings can last longer.  Younger workers 50 years old and below in 2007 will be required to 
take up a compulsory annuity programme called CPF LIFE so that their income  can last for life.  
Older persons can opt to take part in the scheme if they wish. 
19. Social Safety Nets .  While Singaporeans have generally  benefited from globalisation and 
strong economic growth, some have benefited more than others.  To ensure that all segments of 
society continue to have the opportunity to su cceed, Singapore has instituted a range of policies 
including re-training, skills upgrading, affordab le healthcare and housing, and a wage supplement 
programme known as the Workfare Income Supplem ent. A good education system based on merit has 
also helped to facilitate social mobility and move families out of the poverty trap.  Re-distributing 
fiscal surpluses to Singaporeans, with  more going towards the elderly and the needy, has also helped 
to ameliorate the effects of wage dispersion. 
20. Ageing Population . Singapore is also preparing for challenges that are further out on the 
horizon, such as an ageing population.  Singapore has one of the world's fastest ageing populations.  
By 2030, one in five residents will be 65 and abov e, from one in 12 today.  Singapore's strategies to 
prepare for an ageing population are to enhanc e the employability and financial security of 
Singaporeans; provide holistic and affordable hea lthcare and eldercare; promote an active ageing 
lifestyle; and enable a conducive environment for ageing. 
III. TRADE POLICIES 
21. Objectives . Singapore's trade policy objective is to promote a free, open, and stable 
multilateral trading system.  Without a sizeable  domestic market, Singapore is by necessity WT/TPR/G/202 Trade Policy Review 
Page 8 
 
 
 outward-oriented.  In 2007, the trade to GDP ratio  was 348%, the highest in the world.  It is in 
Singapore's vital interest to advance the global trade and investment liberalisation agenda and ensure a 
strong rules-based multilateral trading system. 
22. Singapore has benefited from the certainty and stab ility of the rules-based multilateral trading 
regime provided by the WTO which has brought grea ter predictability and security to the conduct of 
trade among nations.  Singapore believes that the su ccess of the global trading system depends on 
simultaneous efforts to pursue the maximum possibl e extent of liberalisation on the multilateral, 
regional and bilateral fronts. 
23. Multilateral . Singapore's principal priority remains the WTO, and the Doha Development 
Agenda.  The Doha Round has entered the final phase with the release of negotiating texts on 
Agriculture, Non-Agricultural Market Access (NAM A) and most recently Rules (anti-dumping and 
subsidies, including fisheries subsidies).  Ther e has been a qualitative change in the negotiating 
dynamics and Singapore has actively participated in the negotiations in all areas including NAMA, 
Services and Rules.  Singapore has tabled proposal s and made constructive suggestions on ways to 
move negotiations forward, and conclude a deal of high ambition. 
24. Regional . Singapore believes that regional and bilate ral trade liberalisation efforts could be 
useful building blocks for multilateralism.  The role that trade has played in driving Asia's economic 
development is evident.  ASEAN's overall trad e for instance more than tripled from about 
US$430 billion in 1993 to US$1.4 trillion in 20061, in just over a decade. ASEAN is pursuing several 
economic integration initiatives to further enhance and facilitate trade in the region and with the 
world, and Singapore plays a key role in driving the process. 
25. ASEAN . A landmark development for ASEAN in 2007 was the signing of the Declaration on 
the ASEAN Economic Community (AEC) Blueprint by ASEAN Leaders, at the 13th ASEAN Summit 
held in Singapore.  The goal of the AEC initiativ e is to realise by 2015, a single market and 
production base, with the free movement of goods , services, investment and skilled labour and the 
freer flow of capital in the region.  The AEC Bl ueprint is a publicly available document detailing 
economic integration measures that ASEAN Member States are committed to implement, and the 
timelines they have to abide by.  These measures include initiatives like the enhancement of ASEAN's 
trade in goods and investments agreements, commitmen ts to progressively liberalise trade in services, 
development of an Intellectual Property Rights (IPR)  action plan, and development of a workplan on 
Competition Policy.  In parallel with pursuing inte rnal integration, ASEAN is also working on 
deepening economic relations with its  dialogue partners in the region.  ASEAN is in various stages of 
FTA negotiations with China, Japan, Korea, India, the EU, and Australia and New Zealand.  As part 
of the ASEAN regional grouping, Singapore also con tinues to be involved in these negotiations.   
26. APEC . Beyond ASEAN, Singapore participates actively at Asia-Pacific Economic 
Co-operation (APEC) meetings, which is viewed as  a key forum to promote free and open trade and 
investment in the Asia Pacific region.  Under the Ch airmanship of Australia in 2007 and Peru in 2008, 
APEC has continued to deepen regional economic integration and make progress toward the Bogor 
Goals of free and open trade and investment.  In a ddition to tariff reduction and liberalisation at the 
borders, APEC members have also focused their a ttention on behind-the-border barriers to trade and 
investment across the region.  Notably, Minister s have endorsed the second Trade Facilitation Action 
Plan (TFAP II), which sets out a framework and ti metable for APEC economies to achieve a further 
reduction of 5% in trade transaction costs by 2010.  In addition, almost all APEC economies are 
                                                      
1 Source:  ASEAN Secretariat Singapore WT/TPR/G/202 
 Page 9 
 
 
 participating in the APEC Business Travel Card scheme, which facilitates the movement of business 
travelers within APEC.  Looking forward, Singapore,  as host of APEC 2009, will seek to maintain the 
momentum on Regional Economic Integration in APEC. 
27. ASEM . The Asia Europe Meeting (ASEM) partners hip structure is an important framework 
of cooperation uniting Europe and Asia.  Singapore believes that ASEM has value as a platform for 
frank dialogue between Asian and European leader s, and we are committed to further promoting 
Asia-Europe interaction through the ASEM process. 
28. Bilateral . On the bilateral front, Singapore has signed FTAs with New Zealand, Japan, the 
European Free Trade Association, Australia, the Unit ed States, Korea, India, Jordan, Panama, and a 
four-party agreement with Chile, New Zealand, and Brunei.  Discussions are ongoing with China, 
Canada, Pakistan, and Ukraine.  Singapore recen tly concluded FTA negotiations with the Gulf 
Cooperation Council in January 2008 and with Pe ru in September 2007.  Both agreements are 
undergoing checks by the respective legal counsels and would be signed within the year.   
29. Singapore views its bilateral FTAs as a critical complement to the efforts at the multilateral 
level.  We have painstakingly ensured that Singapore's FTAs are co mprehensive, WTO-consistent and 
in many aspects, WTO-plus.  They are comprehensive in that they cover all aspects of trade, including 
Goods, Services and Investment.  They are WTO-cons istent in that elements in the FTAs are based 
on, and are not in conflict with, WTO rules.  They  are WTO-plus in that they go beyond existing 
WTO obligations to achieve a freer and mo re predictable trading environment.   
30. Singapore's bilateral agreements have set the st age for broader trade agreements.  The FTAs 
with Japan and Korea for instance have set the platform for ASEAN to negotiate the ASEAN-Japan 
Comprehensive Economic Part nership (AJCEP) and ASEAN- Korea Free Trade Agreement 
(AKFTA).  Moreover, the high-standard, compre hensive agreements can catalyse further trade 
liberalisation by binding domestic reforms, and ev entually regionalising or  multilateralising those 
liberalisation measures.   
31. Engaging Emerging Markets . Singapore is increasingly looking to establish economic 
relationships with emerging markets beyond the region,  such as China, India, and the Middle East.  
For instance, Singapore has established economic zo nes such as the Singapore-India Economic Zone, 
and business networking platforms such as the Saudi-Singapore Economic Cities Business Forum and Abu Dhabi-Singapore Joint Forum.  In addition, Singapore also opened trade offices in Abu Dhabi 
and Jeddah in 2007, and st epped up its presence in other emerging markets such as Vietnam, Russia, 
and Latin America.  
IV. COMPETITION AND LIBERALISATION POLICIES  
32. Competition Policy . Competition has always played a key role in Singapore's economic 
development.  In 2004, Singapore adopted a generic competition law.  The Competition Act helps to 
further promote competition in our markets by providi ng a more even playing field for all businesses.  
The Act is applicable to all undertakings, i.e. all natural or legal persons ca pable of commercial or 
economic activity, and includes government-linked co mpanies.  Some sectors are, however, excluded 
from the law due to public interest considerations  such as national security and defence, or because 
they are from sectors or activities which already have sectoral competition frameworks.  These 
include the telecommunications and energy sectors. 
33. Intellectual Property . With Intellectual Property Rights (IPR) becoming an essential tool for 
facilitating business and economic grow th, Singapore's robust IP infrastructure and pro-IP business WT/TPR/G/202 Trade Policy Review 
Page 10 
 
 
 environment have helped to create, maintain and enhance the business climate, making Singapore a 
secure base for an enterprise's entir e spectrum of operations.  Singapor e has consistently enjoyed high 
international rankings for its strong and dynamic IP protection regime.  For the fifth year in a row, 
Singapore has been ranked No.1 in Asia for IP protection by the World Economic Forum's Global 
Competitiveness Report 2006-2007, and in the World Competitiveness Yearbook 2006 by the 
Institute of Management Developmen t.  This is an area that we  will continue to improve on. 
34. Liberalisation of Services .  Singapore has undertaken major liberalisation efforts in recent 
years in the financial services, energy, and telecommunications sectors. 
35. Financial Services . Since 1999, Singapore has adopted a phased liberalisation of the banking 
sector, which has led to a relatively high foreign pe netration of the Singapore banking system.  As of 
2007, foreign banks hold an estimated 40% of non-bank de posits and nearly half of loans to residents. 
The aim of the phased liberalisation approach is to build a strong and competitive banking sector 
where local banks continue to play an important role in fostering banking system stability.  Apart 
from the banking sector, the insurance a nd capital markets are fully liberalised. 
36. Energy . The Phase 2 of the electricity retail market liberalisation was completed in 
February 2006.  This opened up 75% of Singapore's  total electricity demand to retail competition.  
The remaining 25% comprises small consumers made up mainly of households.  The Energy Market 
Authority of Singapore is actively exploring ways to benefit this market segment by enhancing retail 
contestability.  In addition, the Government ha d decided in 2000 to further free up the Singapore 
electricity market with Temasek divesting the three incumbent generati on companies (gencos).2  Tuas 
Power was the first genco to be divested, a nd was sold to China Huaneng Group recently for 
S$4.2 billion.  We believe that liberalisation and open competition will reap efficiency gains and the 
benefits will be passed through to the consumers. 
37. Telecommunications . The information-communications sector is a key contributor to 
Singapore's economy.  Singapore has been consiste ntly ranked high in the World Economic Forum's 
Global IT Report and is the only Asia-Pacific ec onomy in the top five positions over the last 
five years.  The Telecom Competition Code, in place since 2000, spells out the key regulatory 
responsibilities of all providers of telecom systems and services, including their duties to end users.  The Code has helped to promote effective and sustainable competition in the telecom sector. 
V. DOHA DEVELOPMENT AGENDA 
38. Singapore's Policy for the DDA . Singapore strongly suppor ts the multilateral trade 
negotiations, and believes that the successful conclusion of the DDA depends on the entire WTO 
membership.  The failure of the DDA would mean  a triumph for protectionism, which would be 
detrimental to the multilateral trading system and inte rests of all countries, particularly the smaller and 
developing members.  Singapore will spare no effort in working with all WTO members towards an expeditious and successful conclusion of the DDA.  
39. Singapore's Priorities in the DDA . Singapore's substantive econom ic interests lie in NAMA, 
Services and Rules.   
40. NAMA . Almost all of Singapore's merchandise expor ts are non-agricultural.  Therefore, in 
terms of market access in this Round, NAMA is a very  important area for Singapore.  Our objective in 
NAMA is to seek significant market access impr ovements through the swift and substantial reduction 
                                                     
 
2 They are Tuas Power, PowerSeraya and Senoko Power. Singapore WT/TPR/G/202 
 Page 11 
 
 
 of tariffs, through a robust Swiss-formula modality a nd sectoral liberalisation, and non-tariff barriers.  
Together with other like-minded developing Memb ers, we have put forward proposals aimed at 
securing a middle-ground solution in NAMA.  To complement our approach in NAMA, we also advocate a good outcome in sectoral initiatives to re duce and eliminate tariffs in numerous sectors 
including chemicals, pharmaceuticals and medical de vices, and electronics.  We would continue to 
work with other sectoral proponents in reaching out to other Members.  
41. Services . While Singapore sees Services as one of the key market access outcomes in the 
Doha Round negotiations, we  believe that the sequence that Mi nisters committed to in the Hong Kong 
Ministerial Declaration should be upheld.  Singapore is firmly focused on the need to ensure a good 
outcome in Services, and believes that the drafting of the Services text should not become an obstacle 
towards that end.  In this respect, Singa pore has worked with like-minded Members on a 
common-ground text for Services in an effort to facilitate progress in the Services negotiations.  
Further, as envisaged in the Hong Kong Ministerial Declaration, Singapore is hopeful that a balanced 
set of palatable disciplines could be adopted at the same time as the conclusi on of the market access 
negotiations.  Singapore's objectives are to have discip lines on domestic regulations that could help to 
provide effective access to markets, while at the same time, the discip lines should be such that they do 
not prejudice regulators' ability to regulate the various services for legitimate policy purposes.   
42. Rules .  Singapore is also seeking clarifications and improvements to the current trade remedy 
rules, particularly in the areas of anti-dumping.  More recently, Singapore, together with the Friends 
of Anti-Dumping Rules (FANs) group, have tabled textua l proposals to the Chair's draft text to further 
clarify the disciplines under the Anti-Dumping Agreem ent.  Singapore, together with other ASEAN 
members, have most recently submitted a joint co mmunication, calling for the issuance of a revised 
text.  Our industries have interests in clarifyi ng WTO rules especially with regard to the 
Anti-Dumping Agreement and we will continue to ensure that our voice is heard. 
43. Dispute Settlement . The Dispute Settlement Mechanism is the cornerstone of the rules-based 
multilateral system of the WTO, providing all memb ers, small and large, with access to a legally 
binding avenue to settle trade disputes.  This is an invaluable asset of the WTO and Singapore will 
continue to support the Dispute Settlement Body. 
44. Aid-for-Trade . Singapore believes in the developmen t dimension of the Round.  Singapore 
supports the objectives of the Aid-for-Trade Initiative (AFT) through, inter alia , the Singapore 
Cooperation Programme (SCP), Singapore's technica l assistance programme to developing countries.  
We have been sharing our development experien ces with other countries si nce the inception of the 
SCP in 1992.  As a strong supporter of free trade,  Singapore has committed substantial resources to 
help strengthen the human resource and institutiona l capacity of developing countries in harnessing 
trade as an engine of growth and development.   
45. As much as 80% or more of SCP programmes have a direct or indirect contribution to AFT.  
Through the SCP, Singapore has been organisi ng technical assistance programmes on trade policies 
and regulations to equip devel oping countries with the requisite knowledge on trade opportunities and 
skills to access them.  They cove r areas such as trade policy and planning, e.g. market access and 
trade facilitation, trade liberalisation and negot iation, dispute management and anti-dumping; 
economic infrastructure, e.g. sea and airport management, logistics and distribution, customs management and ICT;  macroeconomic  reforms and trade liberalisation, e.g. banking, trade financing, 
enterprise development and competitiveness; and ot her areas in which Singapore has experience. 
__________