According to 2014 data, the goods trade relation between Singapore and the USA stands at US$30.2 billion for the exports to Singapore and US$16.4 billion for the imports from Singapore, basically in line with data for the past five years from 2010 onward.
Notwithstanding the difference in size between the world's largest economy and the city-state, Singapore ranks as the 13th largest export market for the USA, and the 17th largest trading partner (US$47 billion), and in the over eleven years since the US-Singapore Free Trade Agreement came into effect in 2004, exports from the US to Singapore have grown by almost 50%.
Furthermore Singapore ranks as the #1 ASEAN export market for the US, representing almost a hefty 40% of total US exports to ASEAN.
On the FDI side, Singapore emerged as the most attractive investment destination in Asia for US companies with US investments at S$114 billion in 2013, thus reconfirming the USA as the #1 investor in the city-state (the #2 being the Netherlands with FDI at S$84.3 billion, and Japan at #3 with FDI at S$71.9 billion).
Make it reverse and Singapore invested "only" S$10.2 billion in the USA, an amount similar to that invested in Bermuda (S$10.4 billion) while the #1 destination is China where Singapore invested S$103.2 billion in 2013.
These data reconfirm the role of Singapore as strategic business hub and leading gateway to the ten markets of the ASEAN region, as well to the Greater China and APAC markets, thanks to its 21 effective FTAs, zero-bureaucracy and corruption-free business-friendly environment, the 3rd lowest corporate tax in the world, effective legal system, best IP protection, along with the list of accolades like 2nd most competitive economy in the world, best country in the world to do business, and only country in Asia to have the AAA credit rating, to name just some of the landmarks that contribute in making Singapore a unique model in the global business landscape.
US Ambassador to Singapore, Mr. Kirk Wagar, during a speech at the Singapore Press Club underlined the high standing of the US-Singapore relation and English-speaking business society and US-style of doing business making Singapore a great regional trading hub.
Indeed over 2,000 US companies have elected Singapore as new home and HQ to run and manage business in Asia at the local, regional, and global levels.
And the recently signed TPP (Trans-Pacific Partnership), the free trade agreement between twelve countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, USA, and Vietnam) representing 40% of global economy and 30% of world trade, will boost greater investments and enhanced trade between the US and Singapore.
Singapore will benefit from the TPP by having improved and increased access to two of the world's largest economies, namely the USA (#1) and Japan (#3), and by opening new markets, like Canada and Mexico with whom the city-state does not have a direct bilateral free trade agreement, and under the TPP both new markets will eliminate tariffs on almost all of Singapore's exports.
But specifically on the US-Singapore connection, many American SMEs will take advantage of the TPP benefits to start operating in Singapore, and via Singapore to other ASEAN and APAC markets, with greater ease and confidence to conduct new business.
Just in my home state of Florida 93% of the companies exporting goods to TPP countries are SMEs. Of course the same will work for Singapore on the reverse track as 99% of Singapore companies are SMEs and employ 70% of the workforce.
At the same time, following the TPP, another advantage for some US companies will be considering delocalising manufacturing capability (and for some of those companies currently operating in China considering shifting production) to two major ASEAN economies joining the TPP like Malaysia (US$13 billion in exports from the USA, US$30.4 billion in imports to the USA in 2014, and ranking #19 as US trade partner) and Vietnam (US$5.7 billion in exports from the USA, US$30.5 billion in imports to the USA in 2014, and ranking #26 as US trade partner).
Just consider that the #1 US custom district, Los Angeles, handled in 2014 a total trade of US$7.4 billion with Singapore, ranking #12 among the countries trading with LA (with Vietnam at #5 with US$12.8 billion of trade, and Malaysia at #13 with US$7.2 billion of trade).
Now with TPP in place, along with the leading sectors for US exports to Singapore (aircraft and aircraft parts, computer hardware and software, construction and building products, electronics, green tech, medical devices, oil and gas, telecommunication equipment, university and executive education) other segments will experience market opportunities due to rising demand (food & wine, design, luxury) from an increasingly sophisticated middle class with higher disposable income and a refined discerning taste.
In its path in pursuit of excellence, Singapore remains a shining beacon in Asia, and will continue to enjoy its premier position in the Asia-Pacific highly competitive landscape attracting investments and boosting business and trade locally, regionally, and globally.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
Do you know more about this story? Contact us anonymously through this link.
Antonio Acunzo is the CEO at MTW GROUP | Foreign Market Entry Advisors, a market-entry strategy and brand marketing advisory firm founded in Florida, and with Asia-Pacific office in Singapore. He brings with him over 15 years of experience in international business in the US and Asian markets focused on the Luxury and THL industries, and is a regular speaker at marketing and international business events.