SINGAPORE Round two of trade talks between Singapore and the United States, focusing on intellectual property (IP) rights protection, telecommunications and electronic commerce, is slated to commence in July as the two countries move closer to a historic free-trade agreement that would boost high-tech trade.
Singapore was removed last month from the U.S. watch list of countries that fail to protect American companies' intellectual property (IP) rights. The move was seen here as a positive step toward a framework trade agreement. The United States is Singapore's second-largest trading partner; the small country derived more than $42.2 billion in revenue last year from U.S. trade.
The trade negotiations are being led by Ralph Ives, assistant U.S. trade representative for Asia-Pacific affairs, and Singapore's veteran ambassador-at-large, Tommy Koh. The third and final round of the talks is scheduled for September, just before the 21-member A sia Pacific Economic Cooperation (APEC) forum convenes.
Washington extended an olive branch to Singapore when it removed the country from its list of IP rights violators, said Shawn Lim, a trade attorney here. "Singapore was given some legitimacy with regard to protecting intellectual property rights," Lim said, adding that the U.S. gesture "has reinstated [Singapore] as a favored trading nation in the eyes of the world."
U.S. rules on IP rights protection exceed the standards set by the World Trade Organization, said Narayan Sreenivasan, vice president of Paramex Software, here. But the Singapore trade delegation said the government will abide by the stringent standards for protection of patents, copyrights, trademarks, trade secrets and other forms of intellectual property.
Singapore had previously been penalized for abuses of IP rights. A U.S. report criticizing Singapore's IP rights record had proved "an eye-opener [for] enforcing U.S. trade laws and in promoting free trade and helping to br ing down trade barriers between countries," Lim said. He acknowledged that Singapore's IP rights record and the high duties it levies on such luxury imports as distilled spirits, wine, tobacco additives and autos remain barriers to U.S. exports and investment.
The U.S.-Singapore talks will focus on trade in goods and services, investment, electronic commerce, telecommunications, customs, textiles and dispute resolution. Among the issues yet to be resolved is the ability to raise certain tariffs, trade officials said.
Despite the concerns, officials on both sides expressed confidence that all outstanding issues will be resolved by the end of the year. Singapore already has a free trade pact with New Zealand and is in talks with Japan, Canada and Australia. The United States has similar free-trade agreements with Canada, Mexico and Israel.
Ives said Singapore and the United States have a strong trading history, with few perceived barriers. One benefit of negotiating a free-trade agreement with Sing apore is that it sets a precedent for the rest of the Asia-Pacific region, he said. "The U.S. under a new administration has more time to take a closer look at the fine print of the deal," Ives said.
Koh, the chief negotiator for Singapore, said he hopes for swift agreement on a trade deal. But "although in our hearts we would like to conclude this agreement as quickly as possible," he said, "our heads tell us we should move with [due deliberation]."
In sectors like telecommunications and e-commerce, where both countries plan to introduce new technologies and services, more time will be needed to complete a deal. "We're actually creating a precedent, and we need a little more time to come to an agreement," Koh said.
Telecom will be a major area of discussion, since a lot of new services [for] both third-generation (3G) and broadband will be made available within the next few years, said Steve Chang of Singapore's StarHub Telecommunications. "There may be some regulatory issues on hand to discuss before this industry picks up," Chang said.
Other trade topics to be discussed include local limits on the use of home satellite receivers and direct-to-home satellite television services, as well as restrictions on the foreign ownership of broadcasting services. Media control is a sensitive issue here .
Outsiders said the government must ease restrictions on media ownership if that industry is to prosper. "How can Singapore hope to be a global hub for media services and broadcasting if it restricts foreign ownership?" asked John Jenkins, a program director for an international media company based in Singapore. "On one hand, it wants to open up, draw in foreign talents and play in the big league; on the other hand, its parochial approach to broadcasting and media ownership makes it almost a recalcitrant international media player, by adopting double standards."
The United States is also looking to overhaul some of Singapore's financial practices. One goal is to end the exclusion of foreign banks from Singapore's electronic-banking network.
Neighboring Asian countries, meanwhile, have raised concerns about the breadth of the proposed U.S.-Singapore trade agreement. Malaysia is worried that a free trade accord with Washington could make Singapore a "back door" for foreign goods entering the Association of Southeast Asian Nations' (ASEAN's) Free Trade Area (AFTA). Singapore has also been criticized by Malaysia for not joining the AFTA accord.
The Singapore government considers a product to be from an ASEAN member only if at least 40 percent of its content comes from within the region. To satisfy AFTA rules, exporters have to produce a certificate of origin. No product from an ASEAN member can receive preferential tariff treatment unless it meets that criterion.