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The United States already has free trade agreements with Canada, Mexico, Israel and Jordan and is negotiating free trade agreements with Central America, Australia, Morocco, the Southern African Customs Union and Bahrain. The United States is also a member of APEC, an organization that pursues free trade and investment in the Pacific region, and has negotiated with 33 other countries in the Western Hemisphere to establish a free trade area for the Americas. Given the trend to negotiate more free trade agreements, the agreement with Singapore would essentially give Singapore the same status as other countries that already benefit (or could benefit) from free trade with the United States. In the industry`s review of the free trade agreement, the Industry Advisory Committee on Textiles and Clothing indicated that the greatest interest and division among committee members revolved around rules of origin and whether they could become a precedent for other trade agreements. Members of the fibre, yarn and textile sector have largely supported the requirements of a rule on feed for yarns that grants benefits only to signatories to the agreement and not to third parties. They believe this condition is an appropriate precedent for future trade agreements and, since they believed it was broadly consistent with the North American Free Trade Agreement, it could create parity among the United States` trading partners. However, the industry expressed concern about what it saw as high tariff rates during the phases of the agreement, which could undermine the rules of origin in the early years of the agreement. (23) The FTA links investor protection to standards developed under customary international law, but environmentalists and business representatives differ as to the meaning of this standard and whether it sets parameters that exceed or fall below the standard of US law (which negotiators cannot exceed). With respect to indirect expropriation, the free trade agreement includes the test that the U.S. Supreme Court uses to take regulatory action. The Singapore Free Trade Agreement differs from the various clarifications on the North American Free Trade Agreement (NAFTA) in that it requires Singapore and the United States to treat investors under “customary international law” rather than “international law.” The latter was the NAFTA language read by NAFTA panelists to include obligations under other international agreements such as the World Trade Organization.
Such interpretations are explicitly rejected in the Singapore Free Trade Agreement by including text stating that a violation of other provisions of the Free Trade Agreement or other international agreements does not constitute a violation of the minimum standard of treatment. The FTA also includes the wording of the NAFTA clarification that the minimum standard in international law for the treatment of aliens is the standard that investors must be granted, and that the obligations set out in the agreement to ensure “fair and equitable” treatment and “full protection and security” do not create significant obligations beyond that standard. (27) The Agreement was supported by industry and consumer organisations, but was criticised by workers and certain environmental interests. Specific concerns raised include sanctions restrictions on intractable disputes over labour and environmental issues, the Integrated Procurement Initiative, potential capital controls, temporary visas, and access to U.S. chewing gum exports. A fundamental political question regarding the free trade agreement is whether the United States should conduct free trade and investment relations on a bilateral basis, rather than maintaining existing trade and investment practices on both sides or pursuing more liberalized trade relations through other means. It is also a question of the extent to which the wording of the free trade agreement should serve as a model for other agreements. General opposition to the free trade agreement comes mainly from the working class, anti-globalization and certain environmental interests. Specific provisions were also discussed, in particular whether these provisions were to serve as a model for future free trade agreements with other countries.
The AFL-CIO, for example, generally rejects supplementary free trade agreements. Their position (which reflects some of the concerns of their affiliates) is that free trade agreements (such as the North American Free Trade Agreement) have cost hundreds of thousands of American jobs and undermined workers` bargaining power. The AFL-CIO also claims that free trade in many developing countries has led to widespread environmental degradation and widened the income gap between the world`s richest and poorest citizens. (9) The specific provisions of the Agreement which have been challenged, such as temporary business visas, the Integrated Supply Initiative, chewing gum and capital controls, are discussed later in this report. As far as U.S. security interests are concerned, the free trade agreement would add a formal economic link to the security relationship with Singapore. In 1990 and 1992, Singapore signed access agreements that provide for limited use of air and naval facilities in Singapore by the United States. This was due in part to the withdrawal of U.S. forces from the Philippines.
The 1990 Access Memorandum of Understanding with the United States allows the U.S. Armed Forces to operate supply ships from Singapore and to use the naval base and ship repair facilities at Sembawang Port and Paya Lebar Military Airfield. An amendment to the 1998 Memorandum of Understanding allows the United States access to Singapore`s new draught dock at Changi Naval Base. In 2001, the USS Kitty Hawk was the first foreign ship to dock there. (54) Although the FTA would not significantly affect such defence cooperation, it could provide an economic justification for maintaining close relations with Singapore on all fronts. Singapore`s extensive free trade agreements (FTAs), coupled with a transparent legal system and a well-educated workforce, have been credited with accelerating the country`s transformation into a first-world economy. The deal was backed by the business community and consumer organisations, but was criticised by workers and some environmental interests. Specific concerns raised include sanctions restrictions on intractable disputes over labour and environmental issues, the Integrated Procurement Initiative, potential capital controls, temporary visas, and access to U.S. chewing gum exports. A fundamental political question regarding the free trade agreement is whether the United States should conduct free trade and investment relations on a bilateral basis, rather than maintaining existing trade and investment practices on both sides or pursuing more liberalized trade relations through other means.
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