President Bush signed the Singapore-Chile Free Trade Agreement (FTA) Wednesday, the first such arrangements with a South American country and an Asian nation. Both FTAs, which were approved by Congress earlier this summer, will take effect on Jan. 1.
U.S. technology companies exported nearly $6 billion in high tech goods to Singapore last year. Singapore is also the top destination for U.S. investment within the Association of Southeast Asian Nations (ASEAN), hosting $27 billion in U.S. direct investment. With two-way trade totaling $32 billion in 2002, Singapore is America’s 11th biggest trading partner.
The U.S.-Chile FTA puts the U.S. high tech industry on equal footing to compete freely with Chilean and third-country industries, such as those in Canada and the European Union (EU), which have already implemented bilateral free trade agreements with Chile.
“The agreement (with Chile) will benefit many American industries, including agriculture and construction equipment, autos and auto parts, computers, medical equipment, paper products and financial services. American-made heavy machinery, such as a motor grader, costs $11,220 more in Chile because of extra tariffs. If that machinery were made in Canada or the European Union, it would carry no tariff,” Bush said. “Our trade agreement with Chile will eliminate these kinds of tariffs and our manufacturers will be able to compete on a level playing field. And as we sell that heavy equipment into Chile, somebody is more likely to find work in America in a good, high-paying job.”
Bush added, ” This agreement will increase access to Singapore’s dynamic markets for America’s exporters and service providers and investors. The agreement contains state of the art protections for Internet commerce and intellectual property that will help drive growth and innovation in our technology sectors.”
The Information Technology Industry Council (ITI), a trade association of leading U.S. providers of IT products and services, was quick to praise the deal.
“ITI has long supported the expansion of global markets to facilitate U.S. exports of goods and services,” said Ralph Hellmann, SVP for government relations at ITI. “We commend the Bush administration for recognizing the importance of these historic agreements, which include precedent-setting benefits to the high tech industry in areas such as tariff reductions, e-commerce, services, and intellectual property rights.”
Hellam said The FTAs introduce the concept of digital products and provide broad national treatment and most favored nation commitments so products sold electronically by U.S. exporters receive fair and non-discriminatory treatment. The agreements also confirm that services commitments extend to services delivered electronically, establish permanent duty-free status for these products.
“These agreements set out among the highest standards of protection and enforcement for copyrights and other intellectual property yet to be achieved in a bilateral or multilateral agreement, treaty or convention, while maintaining sufficient and appropriate standards for third party liability,” said Hellmann.