WorldCity, Annual Report: No. 13 Singapore- Free trade pact pays off | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 13 Singapore- Free trade pact pays off

July 20th, 2006

Georgia’s trade with Singapore saw a huge jump to hand the state a $904 million trade surplus.

If trade advocates need evidence that free-trade agreements work, they need only look at Georgia and Singapore.

The United States-Singapore Free Trade Agreement, in force since January 2003, helped commerce between the two countries jump 2.2 percent in 2005. But in Georgia, the pact had a much more dramatic effect: Bilateral trade rose 54 percent, leaving the southern state with a $904 million trade surplus with the Asian nation.

Overall last year, the Savannah Customs District exchanged $1.5 billion in goods with Singapore. Some $1.2 billion came in the form of Georgia exports to Singapore, including a big up tick in the sale of motor vehicles.

U.S. manufacturers shipped nearly $114 million in 18-wheelers and other cargo trucks to Singapore. That was a colossal jump compared with less than $75 million-worth of vehicles a year earlier.

But trucks weren’t the only exports that posted gains. Nearly $113 million in computer parts left Georgia destined for Singapore.That was a huge jump from 2004 whenGeorgia’s exports of computer parts reached just $13 million.

Computer exports held steady in 2005, rising just 1.7 percent to close the year at $29 million.

Optical fibers were Georgia’s third most important export to Singapore, which arguably has Asia’s most sophisticated telecommunications system. Georgia shipped $92 million in optical fibers. That compares with nearly $88 million in 2004.

Aircraft parts also played a key export role as nearly $49 million-worth were shipped from Atlanta and Savannah in 2005. Nearly $26 million in propellers, rotors and other aircraft parts joined another $23 million in regional jet parts. The latter reflected a 72 percent plunge from 2004 when Georgia sent Singapore some $81 million in regional jet parts.

Meanwhile, 2005 proved to be a banner year for U.S. pharmaceutical companies as exports skyrocketed, reaching $82 million – up from just $600,000 a year earlier. Georgia’s shipments of carboxylic acid saw an even more astonishing jump: rising more than 15,000 percent to close 2005 at $75 million. Carboxylic acids are used in manufacturing processes, including in the production of semiconductors, or computer chips.

Singapore is an important computer-chip manufacturing hub. The United States imported almost $1.5 billion-worth of computer chips from Singapore in 2005.

As far as Georgia’s $301.5 million in imports from Singapore last year, computers led the lineup. Nearly $71 million worth of PCs and laptops were shipped to the state from Singapore last year, twice the value of a year earlier.

Electronic cash registers emerged as Georgia’s second most important import from Singapore. Imports from Singapore-based companies, including Evergrow Global PTE and United Test & Assembly Center (UTAC), and multinationals like Samsung, which have plants in Singapore, escalated to more than $51 million. That was up from nearly $44 million in 2004.

Imports of industrial chemical components – polyether and polyesters – were also up, almost doubling to close 2005 at $23 million from $12 million in 2004. Likewise, Georgia-destined shipments of electric capacitors for use in electronics production rose 110 percent to end the year at $20 million.

Under the U.S. free-trade pact with Singapore, the first such agreement between the United States and an Asian nation, all U.S. exports enter Singapore duty free. Tariffs on 92 percent of Singaporean goods entering the United States are being phased out over eight years. The Singaporean Ministry of Trade and Industry said the bilateral treaty is benefiting large multinational companies that already account for more than 60 percent of U.S.-Singapore trade.