Speech by Minister Lim Hng Kiang at the Asia Pacific Council of American Chambers of Commerce (APCAC) Business Summit at Marina Bay Sands Convention Centre

Your Excellency Kirk Wagar, US Ambassador to Singapore,   

Mr George Drysdale, APCAC President,

Excellencies,

Distinguished guests,

Introduction

Good morning to all of you.

It is a great honour for me to join you today at the annual Business Summit of the 27 American Chambers of Commerce in the Asia-Pacific (APCAC).

Trade has played an important role in Singapore’s success

Singapore is celebrating our 50th year of independence this year. 50 years ago, there were many who did not think that we would survive, let alone achieve success. Their views were not without basis. We had limited natural resources and no hinterland. Our domestic market was small. Unemployment was more than 10%.  The prospects were indeed dim.

There were, however, a number of factors that allowed us to set our course for development. For one, Singapore was already an established international port, due to our strategic location and deep sheltered waters.

Second, we adopted economic policies and we ensured good governance.  From our earliest days, we actively sought foreign investment and implemented policies that kept our economy free and open, driven by the reality that our small domestic market alone could not sustain us.

Five decades later, the Singapore economy evolved from a labour-intensive economy to one that is well-diversified and knowledge-based. Unemployment has declined to below 3%.  In 2014, the World Economic Forum (WEF) named Singapore the most open economy for international trade and investment. The same survey also ranked Singapore as the second most competitive economy in the world, after Switzerland.

Today, trade continues to be our lifeblood. Trade is four times our GDP. Despite our small size, Singapore is the 9th largest exporter and 10th largest importer in the world.  As a firm believer of a rules-based trading system, we actively participate in efforts to write rules that promote free trade. These rules ensure a level playing field for small economies like ours, and promote deeper integration between trading partners.

To date, Singapore has 21 bilateral and regional FTAs in force with 32 trading partners. Our FTAs have been instrumental in helping Singapore-based businesses increase cross-border trade by reducing tariff rates, providing market access, easing investment rules, improving intellectual property protection, and opening government procurement opportunities. They have also facilitated the internationalisation of our companies and enhanced the attractiveness of Singapore as an investment destination.

The US and Singapore enjoy a long partnership and American companies have made significant contribution to Singapore’s economic development

It is no surprise that trade forms an important part of the US-Singapore economic relationship. The US-Singapore FTA (USSFTA) was the US’ first FTA with an Asian country. Signed just over ten years ago, the USSFTA was, and still is, a gold standard FTA.

The evidence of our strong economic relations is all around us. Today, the US is our biggest foreign direct investor with investment stock worth US$154 billion. There are over 3,600 American companies present in Singapore; some of whom have grown with us, while others are just starting out.

It would not be possible for me to name all 3,600 companies but let me share a few examples to give you a sense of the spectrum. ExxonMobil celebrated its 120th anniversary in Singapore last year. It grew from a small trading company selling kerosene and lubricants in 1893 to the multi-billion-dollar integrated refinery and petrochemical complex that we see today.

Emerson, an automation supplier for the process industry, will be celebrating its 50th anniversary in Singapore this year. It expanded its presence last year by opening two new facilities, one of which was its Pervasive Sensing Regional Centre of Excellence, Emerson’s first such centre worldwide. This Centre enables companies to remotely perform data collection, analysis and consulting, resulting in improved productivity and cost savings.

In November 2014, we welcomed Amgen, a pharmaceutical company, which opened its biomanufacturing facility in Tuas Biomedical Park. This state-of-the-art plant is the first in Asia and Singapore’s ninth biologics plant. It uses the company’s latest technology that is not just more productive but also greener. This plant costs only a quarter of the usual capital cost and one-third of the operating expenses of a conventional plant. More importantly, it uses 80% less energy and water.

The US should remain engaged in the growing and evolving Asia Pacific 

Many of these American companies are not here just to serve the Singapore market. They come to capitalise on Singapore’s position as the gateway to the ASEAN and greater Asian market.

In the last decade, ASEAN grew at an average of 6% compared to the global average of 4%. The combined ASEAN GDP   was about US$2.4 trillion in 2013. ASEAN member states are also working toward regional economic integration and are making good progress. The ASEAN Economic Community (AEC) will further transform ASEAN into a regional competitive market with free flow of goods, services, investment, skilled labour, and freer flow of capital.

AmCham members are familiar with the opportunities in ASEAN.  AmCham’s 2014 ASEAN Business Outlook survey reported that 79% of American businesses are engaged in a significant level of trade and investment in the region over the past two years. 91% assessed that this level will increase over the next 5 years.

This expected increase in trade and investment is not restricted to ASEAN but encompasses the wider Asia Pacific. The Asia Pacific region is the fastest growing region in the world and is expected to be a key driver for future global economic growth. Singapore and the US have always shared the philosophy that free and open markets are the pathways to prosperity. And we are not alone. Sharing this common goal are 10 other Asia Pacific countries, who are committed to creating ambitious rules that would eliminate trade barriers, provide better protection for our investments and promote new sources of economic growth. Together, we account for 40% of global GDP and one-third of world trade.

This endeavour is the Trans Pacific Partnership (TPP), which is a huge undertaking. Regional integration on such a large scale will bring benefits to our economies and our people.  It will act as a catalyst that will encourage more economies in the region to embrace free trade and promote sustainable economic prosperity and growth.

APCAC represents over 15,000 companies in this region, employs over 10 million people, manages annual trade volumes in excess of US$400 billion, and contributes direct investments of over US$300 billion.  You represent US companies who have influenced and shaped our region, through your willingness to partner local companies, share technology and innovation, and improve the skillsets of local workers. I would like to commend you on your excellent work and encourage you to remain engaged and grow with the region.

Conclusion

Ladies and gentlemen, allow me to express my appreciation to the US and to US companies for your strong partnership throughout these last 50 years and look forward to greater cooperation in the years to come.

I would also like to thank AmCham Singapore and its members for their contribution to Singapore’s economic development as well as the strengthening of Singapore-US relations over the years.  We look forward to your continued partnership for the next 50 years.

Thank you.