SINGAPORE AND CHILE FREE TRADE AGREEMENTS AT THE TWO-YEAR MARK
Free trade agreements with Chile and Singapore have been in effect for two years now. Here is an assessment of how successful they have been in opening new markets for U.S. goods and services.
This past January marked the two-year anniversary of implementing of free trade agreements (FTAs) with two key U.S. commercial partners, Chile and Singapore.
Chile: Two Years of Strong Growth
Total bilateral trade between the United States and Chile rose 85 percent since the FTA came into effect. In 2005, U.S. exports of goods to Chile totaled $5.2 billion, a 91 percent increase from the $2.7 billion level reached in 2003, which was the last year before the FTA came into effect. For the second year in a row, U.S. exports gained market share in Chile, rising to 15.8 percent in 2005.
“The free trade agreement between the United States and Chile is quickly producing very positive and measurable results for both the United States and Chile,” said U.S. Under Secretary for International Trade Franklin L. Lavin. “After breaking down trade barriers from both nations, U.S. exports to Chile have nearly doubled in just two years, which is good news for our growing economy and U.S. workers.”
Under the FTA, U.S. exports continued to win back the market share that had been lost in previous years to other countries that had negotiated FTAs with Chile. Sectors that showed particular increases from pre-FTA levels include the following:
- Automatic data processing machines: up 46 percent to $267.7 million
- Motor vehicles for the transport of goods: up 387 percent to $276.6 million
- Motor cars and vehicles for transporting people: up 120 percent to $116.2 million
- Self-propelled bulldozers, angledozers, graders, levelers, and scrapers: up 132 percent to $117.7 million
- Tractors: up 196 percent to $41.4 million
Singapore: The First Asian FTA Proves Successful
The city-state of Singapore, a center of trade and commerce in Southeast Asia since the early 19th century, has long been an important trading partner for the United States. The FTA with Singapore, the first FTA between the United States and an Asian country, expanded on the thriving relationship by immediately eliminating tariffs on goods and aiming to grant market access to U.S service suppliers equal to that of domestic suppliers.
In 2005, Singapore ranked 11th as an export destination for U.S. goods, buying some 2.3 percent of total U.S. exports. Export of goods to Singapore rose from $16.6 billion in 2003 (the last year before the FTA) to $20.6 in 2005, which was an increase of 24 percent. During this same period, the U.S. trade surplus with Singapore tripled. It rose from $1.4 billion in 2003 to $5.2 billion in 2005.
Important market sectors for U.S. businesses exporting goods to Singapore include machinery, aircraft and parts, optical and medical instruments, pharmaceuticals, plastics, and electronic components.
Along with its FTA commitments, Singapore has developed one of the strongest intellectual property rights regimes in Asia. In 2004 and 2005, the government initiated a series of amendments to its laws governing patents, trademarks, and copyright, plus the laws for manufacturing optical disks, to better protect rights holders. Singapore is a signatory to the major international IPR agreements administered by the World Intellectual Property Organization.
For more information about these FTAs, as well as links to trade information and market profiles for Chile and Singapore, visit export.gov's Free Trade Agreement Web site.