In 2014, the Singapore economy grew by 2.9% and real GDP is forecasted to expand between 2.0% to 4.0% in 2015. Inflation was a low 1.0% in 2014 and CPI is expected to stay low at between -0.5% to 0.5% this year. U.S. exports to Singapore dipped 0.6% to $30.53 billion and U.S. imports from Singapore fell by 7.7% to $16.46 billion. China was Singapore’s top source of imports, followed by Malaysia, United States, Taiwan, South Korea, Japan, Indonesia, United Emirates, Saudi Arabia and Germany.
2015 is known as SG 50 – a celebration of Singapore’s 50th year of independence. Singapore has been ranked #1 in the world for ease of doing business since 2003, when the World Bank Group began these rankings. Trade between the U.S. and Singapore has continued to increase, thanks to one of the most successful FTAs on record, reaching $47 billion in 2014.
Singapore was the United States’ 13th largest export market and 17th largest trading partner in 2014. U.S. exports alone to Singapore have increased by nearly 84.2% since the FTA was signed in 2004. Singapore is a participant in the Trans-Pacific Partnership (TPP) negotiations, through which the United States and 11 other Asia-Pacific partners are seeking to establish a comprehensive next generation regional agreement to liberalize trade and investment in the Asia-Pacific.
Five reasons U.S. companies should consider exporting to Singapore are:
Singapore is generally a free port as more than 99% of all imports enter Singapore duty-free. For social and/or environmental reasons, it levies high excise taxes on distilled spirits and wine, tobacco products, motor vehicles, and gasoline. Competing with global suppliers remains a key challenge for American companies. With the ongoing restructuring of Singapore’s economy, U.S. companies doing business in the country can expect increased operating costs and a continued tightening labor market.
U.S. companies also face technical barriers for beef, pork and poultry products and services barriers such as in the pay television, audiovisual and media services, licensing of online news websites, legal services, banking and healthcare industries. Details can be found in the USTR 2015 National Trade Estimate Report on Foreign Trade Barriers available online at https://ustr.gov/sites/default/files/2015%20NTE%20Combined.pdf.
The next 50 years will present new challenges to Singapore in the form of a maturing economy, growing influence of social media and increasing competition from other trade agreements and ASEAN partners.
U.S. exporters will find a promising market for the following industry sectors in Singapore: aircraft and parts, medical devices, environmental control equipment, computer hardware, software & peripherals, telecommunication equipment, laboratory and scientific equipment, education and oil & gas.
The following are major infrastructure projects, significant government procurements and business opportunities in Singapore:
Many U.S. exporters successfully use agents or distributors to serve the Singapore and other Southeast Asia markets. Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities.
Price, quality and service are the three main factors for Singapore buyers. U.S. exporters should be aware that competition is strong and buyers expect good after-sales service. Selling techniques vary according to the industry and product and are comparable to the techniques used in most other sophisticated markets. It is also important for U.S. firms to visit their representatives and maintain close contact with them.