Video #22 - Singapore/Malaysia: Port Wars & Singapore: Asian Free Trade Deals
Tuesday, January 10, 2006BACKGROUND INFORMATION
Negotiations on a bilateral free trade agreement (FTA) between US and Singapore were finalized on January 15, 2003. Singaporean Prime Minister Goh Chok Tong and President George Bush signed the pact at the White House on May 6 of the same year.
According to the US Chamber of Commerce, "Bilateral trade between the U.S. and Singapore grew to $33 billion (in 2002). Singapore is the 11th largest export for many American-made products and America is the top importer of Singaporean goods." Singapore has a reputation for a well-regulated, secure investment climate. More than 1300 American companies already do business in Singapore and about 330 have their regional headquarters there. Total investment in Singapore by American companies was $23 billion dollars by 2003.
The FTA eliminates all tariffs of consumer and industrial goods from the United States to Singapore. As part of the agreement, Singapore promises to remove restrictions on a variety of services such as high technology sector activities including engineering, medical, information technology, environmental, legal, financial education and distribution. The agreement is also said to set a high standard for future pacts.
Ernie Bower, President of the US-ASEAN Business Council said, "This is the first U.S. free trade agreement with an Asian country, and it is by far the largest we currently have outside of NAFTA. The broad support it garnered across the U.S. political spectrum sends a strong message about the U.S. commitment to the region."
However, Singapore is facing stiff competition as an international transportation hub from neighboring Malaysia. In large part, Singapore's historical importance was due to its geographic position in relation to the Straits of Malacca, one of the world's busiest sea lanes. It continues to serve as an important link for goods shipped between Asia and Europe. Malaysia started taking away Singapore's container trade business with its Port of Tanjung Pelepas (PTP), which opened in 2000, and immediately secured two of Singapore's biggest shipping clients.
Notwithstanding the fierce competition, both nations must work together to survive. Malaysian Foreign Minister Syed Hamid Albar told reporters after meeting Singapore's Deputy Premier Lee Hsien Loong in March of 2002 that: "We may have differences. They will be there but will not stop us from having good bilateral and mutually beneficial relations with Singapore."
The International Monetary Fund's (IMF) managing director, Rodrigo Rato met with Singapore's financial officials and lauded the economic growth the island nation achieved in 2004, with growth projected to be between 5.5 and 7.5 percent this year. On a visit to Malaysia in October of 2004, Singapore's Prime Minister Lee Hsien Loong met with Malaysian Prime Minister Abdullah Badawi. The visit highlighted the fact that the bilateral trade between these nations amounts to about 100 billion Malaysian ringgit a year--making Singapore Malaysia's most important trade partner, with four times more trade than with any other Asean (Association of South East Asian Nations) nation. The visit was portrayed as a move to emphasize the importance of cooperation for the two nations to solve their pending trade issues . All agree that the economic future of the region depends on these nations working together to create a stable financial environment.
SOURCES
"About The US-Singapore FTA Business Coalition." www.us-asean.org/ussfta/index.asp
"Singapore." Agence France Presse, April 21, 2002, www.singaporewindow.org
"Singapore's Economy a Shining Star." Business Report busrep.co.za/index.php?fArticleId=2127657 "U.S.-Singapore Free Trade Agreement." USChamberofCommerce.com/government/issues/international/Singapore.htm
"US-ASEAN Business Council Hails Passage of the US-Singapore FTA." www.us-asean.org
Burton John and Douglas Wong, "Singapore port faces up to competition." Financial Times, July 2, 2002, www.singaporewindow.org
Burton, John, "Singapore softens stance on Malaysia relations." Financial Times, January 13, 2004, www.singaporewindow.org. Netto, Anil, "Dire Straits." Asia Times, March 15, 2002, www.singaporewindow.org
"PM Lee Hsien Loong's visit to Malaysia." Radio Singapore International October 8, 2004, MediaCorp Radio on line.
LESSON PLAY
GRADE LEVEL/SUBJECT:
10-12 grade Economics, International Relations, World History, Geography, International Baccalaureate Programs (IB), Current Events.
PURPOSE:
To present activities to be used in a variety of classroom situations in order to enhance student understanding of the Asian economy and its significance globally.
OBJECTIVES:
Students will be able to:
- Describe the events which lead to a U.S.-Singapore Free Trade Agreement.
- Forecast the effects of the USSFTA for both nations.
- Explain the growth of naval trade in the Straits of Malacca.
- Analyze the future of these ports in relation to regional competition.
- Describe the current relationship between Malaysia and Singapore.
MATERIALS:
- Background information provided.
- Resources on Singapore available at your school's Media Center and the Public Library System in your area.
- Background information available through Internet "search engines."
ACTIVITIES:
May be assigned as group activities or as individual tasks. They may also be designed as preparation for related presentations either by individuals or groups.
- Create a time line illustrating the events which led to the U.S.- Singapore Free Trade Agreement.
- Write an editorial supporting or opposing the USSFTA. Use factual information to support your views.
- Use charts and graphs to show the history of naval trade in the Straits of Malacca.
- Do research on the major ports of the region, including Indonesia and China. Create brochures advertising the best features of each.
- Hold a mock negotiations summit between high level officials of Malaysia and Singapore. Allow student representatives to debate on actual issues and develop possible solutions. Cooperative learning groups may be assigned committees dealing with specific concerns.
EVALUATION:
Individual assignments should be graded by the teacher using established criteria.
Group activities, presentations and projects may be evaluated by teachers and students using the following criteria and scale: Content 1 = Superior (A) Creativity 2 = Excellent (B) Clarity 3 = Good (C) 4 = Fair (D) 5 = Poor (F)
To print this lesson plan:
If your browser does not print frames, try this -- click the right button on your mouse and select "Open Frame In New Window." Then use your browser's print function to print that page. Another option -- choose "Select All" from your browser's pull-down Edit menu. "Copy" the highlighted text and then "Paste" it into any text editor. You can then print it from the text editor.
