Mr Lim Hng Kiang at the Asia Pacific Council of American Chambers of Commerce (APCAC) Regional Business Summit 2011, 4 Mar 2011

SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE ASIA PACIFIC COUNCIL OF AMERICAN CHAMBERS OF COMMERCE (APCAC) REGIONAL BUSINESS SUMMIT 2011, 4 MARCH 2011, 8.15 AM AT MARINA BAY SANDS

Ambassador David Adelman, Ambassador of the US to Singapore,

Mr Steven Okun, Chairman of the American Chamber in Singapore,

Distinguished Guests,

Ladies and Gentleman,

A very good morning to all

Introduction

It gives me great pleasure to be back here at the Asia Pacific Regional Business Summit. When I last spoke to the Council at its Spring Conference in March 2009, the world was plunging down the depths of the global economic crisis. Thankfully, in the last two years, the economic climate has since turned for the better.

According to the International Monetary Fund, global GDP rose by 5% in 2010, reversing the 0.6% contraction seen in 2009. Global financial conditions have improved dramatically. Equity markets have risen; bank lending conditions in the major economies have eased up; and international trade is recovering. After a 12% decline in 2009, global trade flows have rebounded in 2010, growing by 13.5%[1].

The Rise Of Asia

Asia has outperformed the rest of the world during this period. In particular, emerging markets like China and India have been strong engines of growth. According to the IMF’s estimates for 2010, China’s GDP grew by 10.3% and India by 9.7%, well above the global average of 5%. [2]

In the last decade, Asia has become a much more affluent and important market. According to the Asian Development Bank, 56% of Asia’s population is now considered middle class[3]. Since 1990, Asia’s middle class has grown by over 1.3 billion people, more than four times the population of the US.As a result, Asia’s export-driven growth model is increasingly being supplemented by its own growing domestic consumption.

In recent years, Asia has also been accelerating its economic integration to drive growth and development. For example, the ASEAN countries are working toward the goal of the ASEAN Economic Community by 2015.This initiative aims to make ASEAN a single market and production base. ASEAN is also concurrently exploring possible integration pathways like the Comprehensive Economic Partnership in East Asia (CEPEA) and the East Asia FTA, involving the key Dialogue Partners like Australia, China, India, Japan, Korea, and New Zealand.

Asia-An Opportunity For The US

The rise of Asia presents significant economic opportunities for the US, allowing the US to ride the Asian wave out of the economic crisis.

In spite of the downturn, the US remains the world’s largest exporter of goods and services, with total exports of nearly US$1.6 trillion in 2009[4]. According to the US Department of Commerce, export-related employment accounts for more than 6.8 million jobs[5], and supports more than one in every four US manufacturing jobs.[6]

This fact has not been lost on the Obama Administration. Earlier this January, during the State of the Union Address, President Obama outlined his plans to revitalize the American economy. One of the key areas he spoke about was to double American exports by 2014 through the National Export Initiative.

A Robust Free Trade Architecture In The Asia Pacific

Recognizing the importance of the region, the US has made efforts to deepen its linkages with the Asia-Pacific.

As the Chair of APEC 2011, the US has championed a forward-looking agenda. One of its priorities is to strengthen regional economic integration and expand trade through eliminating non-tariff barriers and improving supply chain performance. This would benefit member economies, businesses and workers by lowering the costs of doing business.

Concurrently, the US, Singapore, and seven other Asia Pacific countries are negotiating the Trans-Pacific Partnership agreement. When the negotiations are completed, this will be the world’s third largest FTA in terms of total members’ GDP. The TPP is envisioned to be a 21st century free trade agreement that will meet the needs of businesses today. Some of these new elements include discussions on increasing regulatory coherence and facilitating the growth of small-medium enterprises in the region. As the only regional FTA that spans both sides of the Pacific, the TPP is poised to be a stepping stone towards an eventual Free Trade Area of the Asia Pacific.

These efforts will help towards establishing a transparent and conducive business environment for US companies in the region.

Singapore As The US' Partner In Asia

Singapore is a key partner for the US in the region. Our countries share robust relations, underpinned by a common belief in a free market economy.

Singapore was the first Asian nation to sign an FTA with the US in 2003.Building on this foundation, Singapore also works closely with the US at the APEC and the TPP to further trade liberalization in the region.

Singapore also has long standing relations with many US companies. As a global business city, Singapore has good infrastructure, excellent connectivity and a highly skilled workforce. Singapore is well plugged into the regional markets with an extensive network of 18 FTAs. It is not surprising that many US MNCs have since considered Singapore a home away from home, making the US our largest source of foreign investment.

Many companies see Singapore as the gateway of choice to the region. For example, Procter & Gamble (P&G) announced plans to expand its operations in Singapore earlier this year. It recently commemorated the groundbreaking of its new R&D Innovation Centre to serve regional and global markets. It also opened its iconic Asia Leadership Development Centre to train regional business leaders.

Conclusion

In conclusion, the emergence of Asia represents great economic opportunities for the US and its companies.2011 will be the year for the US to lead efforts to build a regional economic framework in the Asia Pacific towards greater trade liberalization and trade facilitation. Singapore will remain a key partner to the US, and its businesses, to harness the growth of the region together.

I wish you a fruitful day of discussions ahead

Thank you.

[1] Based on WTO estimates.

[2]In contrast, US GDP growth was only 2.6% in 2010.

[3] Middle class is defined by ADB as those with consumption expenditure of US$2- $20 per day.

[4]Office of the United States Trade Representative. Source: http://www.ustr.gov/about-us/benefits-trade

[5] US Department of Commerce, International Trade Administration.

Source: http:/tse.export.gov/JOBS/SelectReports.aspx?DATA=Jobs

[6] US Trade Overview Presentation. US Department of Commerce, International Trade Administration. Source: http://www.trade.gov/mas/ian/tradestatistics/index.asp