Print

Mail

wiki links

US, Singapore near trade arrangement after currency talks

The administration of President George W. Bush announced Wednesday it had cleared away the last hurdle to a free trade agreement with Singapore, wrapping up the deal a month after a similar one with Chile.

Administration officials said a final round of telephone negotiations between Treasury Undersecretary John Taylor and Koh Yong-guan, managing director of Singapore's monetary authority, resolved the lone sticking point: treatment of capital flows during periods of financial crises.

Under the deal, Singapore can impose capital controls if it deems them necessary, but US investors can file claims to recoup any investments that are trapped in Singapore.

While it was unable to get a total prohibition on the use of controls, the administration said it succeeded in making sure they are used infrequently.

The Treasury Department said the agreement "reflects the shared commitment" by the two countries "to the free transfer of capital and the avoidance of capital controls."

After winning the congressional authority last summer that was needed to negotiate new trade agreements, the administration has embarked on an ambitious agenda in an effort to catch up with the 15-nation European Union.

The EU has struck a number of such deals over the past eight years while US presidents have lacked the authority to close deals on which Congress only can vote yes or no, without offering changes.

The administration hopes to use agreements with Chile, Singapore and other countries to add momentum to the negotiations on even bigger prizes: a deal covering all countries except Cuba in the Western Hemisphere, and a new global trade talks covering the 144 nations in the WTO.

The deal with Singapore would wipe out tariffs and other trade barriers on about US$33 billion in merchandise trade between the two nations. It would give US banks and service companies more access to one of Asia's main financial centers.

US Trade Representative Robert Zoellick and George Yeo, Singapore's trade minister, had announced a tentative deal in November.

Officials said the language on capital controls tracked similar wording in the US-Chile deal.

In that pact, US investors can seek damages if Chile decides to impose capital controls, but only after a cooling off period of between six months and one year.

The administration also is beginning negotiations on a free trade agreement with five countries in southern Africa, and has announced the start of talks with five countries in Central America and with Australia.

Congress will have to give its approval to all the deals. The administration said it expected votes on the deals with Chile and Singapore in the spring.

At present, the US has free trade agreements with Canada and Mexico, its partners in the North American Free Trade Agreement, and with Israel and Jordan.
This story has been viewed 2002 times.