Speech by Minister Gan Kim Yong at the US-Singapore Free Trade Agreement 20th Anniversary Business Reception

Ambassador Katherine Tai

Ambassador Jonathan Kaplan

Ambassador Ted Osius

Distinguished guests, friends, and colleagues

Ladies and gentlemen

1. Thank you for joining us this evening to commemorate the 20^th Anniversary of the US-Singapore Free Trade Agreement, or USSFTA.

a. I would like to thank Ambassador Tai for marking this occasion with us.

b. And also thank Ambassador Osius and his team from the US-ASEAN Business Council, for co-hosting tonight's event.

2. Ten years ago, Prime Minister Lee Hsien Loong spoke here in Washington DC on the 10^th anniversary of the USSFTA.

a. He recounted how the decision to launch negotiations was made after a round of midnight golf between President Bill Clinton and Prime Minister Goh Chok Tong in November 2000.

b. The golf game might have been cancelled due to heavy rain and lightning. But Prime Minister Goh showed up anyway hoping that the skies would clear. Sure enough, the rain stopped before the game started.

c. That led to the Leaders' decision to begin the USSFTA journey.

d. After 11 rounds of intensive negotiations, Prime Minister Goh signed it with President George W Bush in 2003, and the agreement was passed by Congress, before it came into effect in 2004.

3. The golf in the year 2000 led to the birth of the USSFTA. But the seeds were planted as early as 1983.

a. During a visit to the region that year, President Ronald Reagan spoke about the importance of strengthening economic ties between the US and East Asia.

b. This developed into a clear strategic imperative for the USSFTA.

i. For the US, it would signal a long-term commitment to engage Southeast Asia, and contribute to the region's development. It would also establish a template for future agreements with other countries.

ii. For Singapore, it would strengthen our domestic economy, reinforce our strong bilateral partnership with the US, and help bring the US and the region closer.

4. The USSFTA was a bridge built at the right place, at the right time.

5. When it came into effect in 2004, the USSFTA was the US' first FTA with an Asia-Pacific country. It remains the US' only FTA with an ASEAN country.

Benefits of the USSFTA

6. Over the past 20 years, bilateral trade between the US and Singapore has almost tripled. In 2022, the US was Singapore's second largest trading partner in 2022, and Singapore the US' 17^th largest.

a. The US has long had a trade surplus with Singapore, which amounted to almost US$40bn in 2022.

b. This is no surprise as the US has been Singapore's top trading partner in services for over 20 years, and our second largest goods trading partner last year.

7. Singapore is also the top recipient of US investment in the Indo-Pacific, and the 7^th highest worldwide. US investment in Singapore is larger than that in China, Japan, and Korea combined, with almost 6,000 American companies currently in Singapore.

a. From the early years of our independence, US companies like Texas Instruments and General Electric established operations in Singapore to capitalise on our location and connections to the region.

b. Today, Singapore serves as a gateway to the region for companies like GE Aerospace and Pratt & Whitney. They have regional Maintenance, Repair and Overhaul (MRO) Centres of Excellence in Singapore to serve regional demand from airlines.

c. We also help to strengthen the supply chain resilience of firms like Meijer, which recently opened its Asia HQ and global sourcing office in Singapore. Meijer intends to use Singapore as its new sourcing base in Asia to deepen partnerships with regional suppliers and vendors.

d. And we are an innovation hub for other businesses like Johnson & Johnson. Its innovation incubator in Singapore, JLabs, will work with early-stage companies in medtech, biotech, consumer health and digital health. It will tap on regional growth opportunities.

8. Singapore is much smaller than the US - in fact we are slightly smaller than New York City - but we are the third largest Asian investor in the US. There are over 200 Singapore companies in around 40 of the 50 states, both larger firms as well as start-ups.

a. Two of these start-ups, Krosslinker and Luminis Water Technologies, clinched top prizes in the start-up pitching competition at the 2023 SelectUSA Investment Summit.

b. Both are founded by women to address different sustainability challenges. Krosslinker deals with deep-tech advanced materials for sustainable thermal insulation, while Luminis Water Technologies seeks to make seafood production more efficient, thereby reducing environmental impact.

c. They are examples of the growing interest by Singapore companies in the US.

9. The US government has estimated that bilateral trade and investment between Singapore and the US supports nearly 250,000 jobs in the US.

a. We hope that greater trade and investment between the US and Singapore will help generate more goods jobs in both countries.

10. The success of the USSFTA demonstrates how two countries can benefit from an open, inclusive, rules-based multilateral trading order. This has underpinned our economic and commercial relationship for the past 20 years.

New Areas of Cooperation

11. Building on the USSFTA, Singapore and the US are already deepening our cooperation in new areas that are important to our businesses and people.

a. We have launched platforms like our bilateral Partnership for Growth and Innovation (PGI), and our bilateral Climate Partnership. These support collaboration in growing sectors like the digital and green economies.

b. Last October, we held our inaugural Critical and Emerging Technology (CET) Dialogue where we seek to identify opportunities in game-changing technologies - like AI, quantum and biotechnology.

12. Singapore is also happy to be working closely with the US on the Indo-Pacific Economic Framework for Prosperity (IPEF).

a. The IPEF is a new model of international economic cooperation. It promotes tangible collaboration and concrete outcomes for our workers and businesses.

b. Slightly over a month from now, Singapore will host the inaugural IPEF Clean Economy Investor Forum, and the next IPEF Ministerial meeting. The Investor Forum will bring together investors, financial institutions, start-up entrepreneurs, project proponents, and political leaders, to facilitate investment and business matching in the clean economy. This will be critical to the region's economic development and transition to a more sustainable future.

13. The Investor Forum reflects the importance of strong partnerships between governments and the business community, including with all of you here.

14. These partnerships have been integral to Singapore's economic development.

a. We appreciate US companies' confidence in Singapore as a preferred business location and gateway to Southeast Asia.

b. And we do not take this for granted. For example, throughout the COVID-19 pandemic, Singapore was one of the few countries which continued to maintain the free flow of goods and services so that businesses could fulfil their contracts.

c. We will continue to serve as a safe and secure regional hub for US businesses.

15. Take AI as an example. Singapore is investing more than S$1bn over the next five years into AI compute, talent, and industry development.

a. This will enhance our AI ecosystem that already offers best-in-class compute infrastructure, access to the region, and a diverse and capable talent pool.

16. Across our economy, industries are leading the way with AI development and innovation, even in the public healthcare sector, and we have frontier start-ups with deep capabilities.

17. The Singapore Government will ensure that we continue to serve as a digital economy hub supported by innovative firms, advanced and highly-connected digital infrastructure, and balanced and pragmatic regulation including:

a. Clear rules to deal with known risks like data privacy and cybersecurity.

b. A collaborative approach to encourage responsible use of emerging technologies, and

c. An unwavering commitment to a free and open Internet and cross-border data flows, including through our network of Digital Economy Agreements.

18. We recognise that we will not succeed in these plans, if we are not seen as a responsible and trusted partner on AI.

a. We believe that AI must be deployed responsibly, so we participate in rule-setting at bilateral platforms such as the PGI and CET Dialogue with the US, regionally through ASEAN, and internationally via the UN High Level Advisory Body on AI.

b. Trust is a premium in AI, and core to Singapore's value proposition as an AI hub, for the world.

Closing

19. The USSFTA has been a pathfinder for our trade and investment relationship over the past 20 years. In the next 20 years and beyond, the next bound of economic cooperation between the US and Singapore can also serve as a pathfinder to

a. Accelerate adoption of emerging technologies like AI;

b. Create innovation ecosystems that are both trusted and vibrant; and

c. Ensure that our collaboration can be a model and a bridge for other countries, to maximise our efforts and investments in technology and innovation.

20. I look forward to working with all of you to lay the foundations for this future. Thank you.

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