WorldCity, Annual Report: No. 16 Singapore - U.S. sees growth in surplus | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 16 Singapore - U.S. sees growth in surplus

July 20th, 2006

The United States entered its first free-trade agreement with an Asian nation in 2003 when it signed a pact with Singapore. In the two years since that deal took effect, commerce between the two countries has improved slightly, with the United States widening its trade surplus in the process.

In 2005, overall trade between the countries rose 2 percent to end the year at nearly $35.8 billion.

Against that exchange, the United States posted a $5.5 billion trade surplus, up from $4.3 billion in 2004. Before the free-trade pact was in effect, annual trade between the two countries was $33 billion, according to the U.S. Commercial Service.

Much of that trade was handled through the Los Angeles Customs District.

Computer chips led all U.S. exports last year but they were off their 2004 totals. They reached a value of $2.6 billion, a 7 percent dip from a year earlier.

The U.S. aviation industry, however, posted solid gains. Aircraft, the second most important U.S. export to Singapore, increased 7 percent to total $1.7 billion, while exports of regional jet parts rose 12 percent to value $1.3 billion. Exports of parts for larger aircraft rose 25 percent to end the year at $920 million.

Capitalizing on global gains in computer sales, the United States also boosted its exports of computer parts, by 22 percent, to $1.2 billion. Exports of machinery parts, meanwhile, improved 58 percent to close the year at $759 million.

While the United States exported computer parts to Singapore, it imported finished computers from the Asian nation – although at a lower value than in 2004. U.S. imports of computers declined 6 percent to value $4.2 billion. There was also a 17 percent drop in imports of computer parts, which ended the year at just more than $2 billion.

Imports of computer parts also fell, by nearly 18 percent, to end the year at $2.1 billion.

Computer chips turned up at the No. 3 spot on the U.S. import list, rising 2 percent over 2004 to value nearly $1.5 billion.

The pharmaceutical industry has seen the biggest gains under the free-trade agreement. U.S. imports of medicines soared to $1.2 billion in 2005, up from just $84 million a year earlier. Imports of chemical compounds, meanwhile, dipped nearly 33 percent to value $553 million.

Singapore’s GDP grew 6.4 percent in 2005, surpassing the 6 percent that had been projected, with much of that growth sparked by a better-than-expected performance by the manufacturing sector. Singapore’s electronics sector expects production to dip slightly in the first half of 2006, although the semiconductor industry is expected to pick up again in the second quarter.

But in the biomedical and chemical industries, companies predict that the first semester of 2006 will be little changed from the performance posted in 2005.

Los Angeles proved to be the busiest Customs district when it came to Singapore trade last year, handling a total of $7.2 billion in two-way cargo. That was a drop of 2 percent when compared to a year earlier.

New York, the leading entry point for products from Singapore, handled $2.5 billion in imports.