WASHINGTON – Singapore and the US will focus on the digital economy, paperless trading and supply chain resilience to ensure that their companies can get more out of their 20-year-old free trade agreement (FTA).

These points were agreed upon during a Joint Committee Meeting of the US-Singapore Free Trade Agreement (USSFTA) on April 30. It was co-chaired by Singapore Minister for Trade and Industry Gan Kim Yong, who is in the US on an official visit, and US Trade Representative Katherine Tai.

“Today’s Joint Committee Meeting reinforced both countries’ shared interest in further advancing mutually beneficial bilateral cooperation, including in facilitating trade through digital tools,” said Mr Gan in a statement after the meeting. 

“This will help ensure that our companies, and particularly our MSMEs, can continue to benefit from the USSFTA,” he added. MSMEs – micro, small and medium-sized enterprises – are often drivers of economic growth, innovation and job creation.

The FTA has helped Singapore’s largest instant noodle maker, Tat Hui Foods, secure business partnerships with key customers in the US.

“From the 2000s when the FTA was introduced until today, Tat Hui Foods’ sales in the market have increased by over 300 per cent,” said Mr James Lim, its managing director. 

“This growth was enabled by the enactment of the USSFTA, which allowed our US-based clients to enjoy preferential tariff rates and, therefore, facilitated expedited market entry for us,” he said. 

The 38-year-old company, which racked up sales worth US$100 million (S$136 million) in 2023 through brands Koka, Sanwa and Yoodles, has customers in 50 countries.

A statement from Ambassador Tai’s office said the two ministers had exchanged perspectives on ways to strengthen supply chains during their conversation.

Geopolitical tensions, wars, natural disasters and extreme weather events in recent years have disrupted global supply chains, prompting concerns about availability of critical goods such as crude oil, semiconductors, pharmaceuticals and minerals.

The ministers also discussed the importance of collaborating with trading partners to align labour and environmental protections, the statement said. The insistence on these aspects while promoting trade has been a key priority in the administration of US President Joe Biden’s worker-centric trade policy.

The two nations are in 2024 marking the 20th anniversary of the USSFTA, which has tripled bilateral trade from US$40 billion in 2003 to US$120 billion in 2022. 

Both nations also acknowledge that the FTA has served a strategic purpose in the way that it had signalled a long-term commitment for the US to engage South-east Asia. The deal remains the US’ only FTA with an Asean country.

Trade experts in Washington call it an almost exemplary deal.

“It’s been remarkably successful by any measure,” Mr Charles Freeman, senior vice-president for Asia at the US Chamber of Commerce, told The Straits Times.

“In terms of building the bricks for a more open and liberalised trade policy, it was a crescendo moment. Its beauty was that it stood for the proposition of the rule of law and transparency,” he said.

Alluding to how both Mr Biden and his presidential rival Donald Trump have signalled a diminished appetite for trade, Mr Freeman noted that the USSFTA stands as a beacon.

“That shared vision for 20 years contrasts pretty dramatically with the vision that’s being articulated from all political sides in Washington today.

“Singapore’s steadfastness and vision have been a source of great hope and optimism for the US business community,” he added.

Mr William Reinsch at the Centre for Strategic and International Studies, who worked in the former Clinton administration, said the trade agreement had grown “the way you would like trade agreements to grow – to the benefit of both sides”.

“But the US has not sufficiently responded to Singapore’s leadership in the region on data agreements and digital trade agreements. Singapore is ahead of most countries in trying to develop those agreements,” he noted.

In 2020, Singapore, Chile and New Zealand signed the Digital Economy Partnership Agreement, a pioneering deal that established new approaches to cross-border data flows and addressed issues brought about by digitalisation. South Korea joined in 2023, while China submitted its application to join it in November 2021.

In November 2023, on the sidelines of an Asia-Pacific Economic Cooperation summit, the US shocked its 13 partners in the Indo-Pacific Economic Framework when it abruptly withdrew support for rules that were meant to facilitate digital trade.

“It’s kind of a missed opportunity for the US,” said Mr Reinsch.