The Washington Diplomat / March 2002
By Larry Luxner
Singapore, the world's only true city-state and one of the most prosperous nations in Southeast Asia, could sign an historic free-trade accord with the United States as early as this June.
That's the optimistic prediction of Chan Heng Chee, Singapore's veteran ambassador to the United States, who notes that until now, the U.S. has free-trade agreements in place with only four countries: Canada, Mexico, Israel and Jordan.
In a lengthy interview Feb. 20, Chee said that an FTA will only solidify the rock-solid relationship between the United States and Singapore, which despite its small size now ranks as America's 10th-largest trading partner. Most of the $42.2 billion in bilateral trade last year was concentrated in high-tech exports such as printed-circuit boards, semiconductors and telecom equipment.
"This will be the first bilateral free-trade agreement the United States will sign with an Asian country," says Chee, who took up her current appointment in July 1996. "It is strategically significant. We see the U.S.-Singapore FTA as a way of anchoring the U.S. economic presence in the Asia-Pacific region. This is especially important when you have a new emerging presence in China."
Chee, like 75% of her fellow Singaporeans, is ethnic Chinese. Another 15% are ethnic Malays, 8% are ethnic Indians and the remaining 2% are of European or other origin. Together, the four million citizens of Singapore (as well as an estimated 17,000 Americans living there) enjoy a quality of life unmatched elsewhere in Asia, with outstanding public services, squeaky-clean streets and nearly universal Internet access.
According to The Economist, Singapore's per-capita income of $30,170 is the seventh highest in the world, behind Luxembourg, Switzerland, Bermuda, Norway, Denmark and Japan -- and just ahead of the United States. Its $96 billion Gross Domestic Product is the 38th largest in the world, and from 1990 to 1998, Singapore's economy grew at an average annual rate of 8.5%, second in the world only to China, whose economy grew by an average 11.2% over the same period.
The country, which is three and a half times the size of Washington, D.C., ranks second only to Hong Kong on the economic freedom index, published by the conservative Heritage Foundation, and third in the 2002 A.T. Kearney/Foreign Policy Globalization Index, trailing only Ireland and Switzerland.
And when it comes to defense issues, Singapore is solidly pro-American -- all of which make it an ideal candidate for an FTA.
"Singapore is a very open country," said Chee. "We observe high standards in labor and the environment. It would be difficult to see why Singapore would be a threat to jobs or U.S. interests."
Yet not everyone in Washington favors globalization and free trade. The Clinton administration struggled for years to push through an FTA with Chile, South America's most advanced economy, to no avail. A bill that would give the president fast-track authority to negotiate FTAs with foreign governments has passed the House of Representatives, but hasn't yet made it through the Senate.
The fact that the U.S. economy has fallen on hard times makes such an agreement with Singapore even more imperative, says Chee.
"You need a strategic presence in different parts of the world," she argues. "In many of these countries, trade really is the lifeline to economic development. Political leaders understand this, but how do you explain it to your constitutents when they lose jobs? It's a question of how you package things."
There's also some concern in the United States with Singapore's authoritarian style of government and restrictions on the press. Americans still vaguely remember the 1994 caning of Michael Fay, the Ohio teenager who was flogged six times and sentenced to a short prison term for vandalizing cars and stealing highway signs.
Under Singapore law, while caning is mandatory in cases of vandalism, rape and weapons offenses, it is also administered for routine immigration violations such as overstaying visas and the hiring of illegal workers. The death penalty is automatic for drug trafficking and firing a weapon while committing a crime.
While such measures may seem harsh, most Singaporeans accept their brand of justice as a part of life, and many credit the system with bringing crime rates down. By the same token, restrictions on the media are also seen as the price for political stability.
"When you are a multiracial society, 75% Chinese in a region surrounded by Muslims, you have to be politically sensitive. The basis of your survival is at stake," said Chee. "Being a city-state is not a normal proposition, and you have to be extraordinary to survive. Given our history and the way we became a nation, we can't take this for granted."
Singapore, which broke away from the two-year-old Malaysian Federation in 1965, has had only two leaders as an independent nation. The first was Prime Minister Lee Kwan Yew, whose rather authoritarian rule began in 1959 -- when Singapore became a self-governing parliamentary democracy under the British Commonwealth -- and ended with his resignation in November 1990.
The second was Goh Chok Tong, who succeeded Yew and remains firmly in control.
"Up until 1965, Singapore never saw itself as as independent nation," said the ambassador. "We had no resources, and maybe that was our saving grace. Because we did not have large deposits of oil or forests, we really had to live by our wits, and people had to work hard. So the political leadership which took the reins of government at independence emphasized the building up of human resources and the value of education.
"Every few years, we review and remake ourselves, because we always want to be ahead of the curve," Chee explained. "We are developing the new economy, but we do not reject the sectors we have already developed. We just add on."
An academic by training, Chee was educated at both the University of Singapore and Cornell, and later became executive director of the Singapore International Foundation, and director of the Institute of Souteast Asian Studies.
Chee began her diplomatic career in 1989 when she was appointed Singapore's permanent representative to the United Nations; she's since written a number of books and articles on international affairs. Her latest book, "A Sensation of Independence," is a biography of David Marshall, a Sephardic Jew of Iraqi origin who was active in island politics in the 1950s and helped set the stage for Singapore's eventual independence.
"We are a very socially organized and disciplined society, and I think Americans find that a little hard to understand," she says, "although when Americans go to Singapore, they often remark how relaxed the people are."
Chee added that "Singapore has loosened up a lot" in recent years, and that "there's much less censorship today than there was 10 years ago."
Yet pockets of instability persist.
In mid-January, officials arrested 15 alleged members of a terrorist cell planning to bomb Western embassies, U.S. naval vessels and a bus that transports U.S. military personnel. According to Singapore authorities, the terrorist group also was planning attacks on a number of non-American targets, among them, buildings housing the diplomatic representatives of Great Britain, Israel and Australia.
Under Singapore law, the 13 men still held may be detained for two years without formal charges, said Chee.
"Our arrests also led to arrests elsewhere," the ambassador told us. "The people who were arrested were Singapore citizens of Malay descent. Their leadership was linked to Jamaah Islamiyah, which has cells in Malaysia and Indonesia. We gave the Philippines some information, and that led to the uncovering of explosives linked to al-Qaeda."
Since then, Chee told The Washington Diplomat, "U.S. companies have expressed their confidence in the Singapore government, and U.S. Ambassador Frank Levin said that after Sept. 11, no place on Earth is perfectly safe, but that Singapore is as good as it gets."
Chee says she's equally confident that Singapore will sign an FTA with the United States by mid-year -- an optimism she also bases on the recent change of leadership in the White House.
"The Bush administration is taking the lead in explaining the linkage between trade and the health of the American economy," Chee said. "Clinton also tried to promote trade diplomacy, but his natural constitutency was Democrats and groups like the AFL-CIO, and I think that limited some initiative."
If an FTA is signed, it won't come a moment too soon for Singapore, which has been hurt by economic slowdown in Japan. Its unemployment rate of 4.5% is dangerously high by Singapore standards, and a devaluation in the Singapore dollar has caused per-capita income to drop -- though Chee says a lifting of barriers to business will help generate more intra-regional trade.
"Many of the countries in the region are in fact working towards signing FTAs with each other. Singapore signed an FTA with New Zealand in 2000, and we just initialed an FTA with Japan in January," said Chee. "We are currently negotiating FTAs with Canada, Mexico and Australia. At a time when other people are closing borders, Singapore is unusually open."
For the United States, she says, the benefits of a free-trade accord are obvious and immediate.
"The FTA gives you an anchor in the region, and it's a signal that the U.S. economic presence is serious, and will be permanent. It will help the U.S. start working toward FTAs with other countries such as the Philippines, Thailand and Malaysia. In view of how slow the World Trade Organization is going, a free-trade agreement is the mechanism by which you push toward trade liberalization," said Chee, who oversees an embassy staff of 40, as well as a Singapore Economic Development Board with offices in Washington, New York, Chicago, San Francisco, Los Angeles and Boston.
Asked when she'll return to Singapore permanently, Chee says she'd like to, but that she's not quite ready.
"Because of the FTA, I will stay a little longer," said the ambassador. "I have to complete this project and see it through Congress."