Singapore was the United States’ 13th largest export market and 17th largest trading partner in 2013. The U.S. goods trade surplus with Singapore jumped 24.7% to nearly $12.9 billion, the highest level ever recorded with Singapore. Exports to Singapore reached $30.7 billion and imports from Singapore were $17.8 billion. The Singapore economy grew by 4.1% in 2013 and the Singapore Government forecasted GDP will expand by 2.0% to 4.0% in 2014.
During the first 10 years of the U.S. Singapore Free Trade Agreement, which came into effect on January 1, 2004, two-way trade has increased 53% and U.S. exports by nearly 85.4%. The United States is Singapore’s 3rd largest supplier of imported goods in 2013. China overtook Malaysia as Singapore’s top source of imports and the other major suppliers were Taiwan, South Korea, Japan, Indonesia, United Emirates, Saudi Arabia and Germany.
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.
Singapore’s open economy attracts suppliers from throughout the world providing tough competition and reducing margins for U.S. suppliers. The country is also seeing increased business costs and a tightening labor market. In response to the concerns voiced by the indigenous population, the government has made a decision to tighten the inflow of foreign workers and has accepted the policy will result in slower growth for the country.
Despite its liberal trading regime, foreign companies face barriers in certain service sectors such as pay TV, audiovisual and media services, legal services, banking, licensing of online news websites, cloud computing for financial institutions, and healthcare: procedural transparency and fairness. Details can be found in the USTR Report on Foreign Trade Barriers that is available at http://www.ustr.gov/sites/default/files/2014%20NTE%20Report%20on%20FTB%20Singapore.pdf.
Singapore is one of the best markets in Asia for U.S. companies hoping to expand their market penetration throughout Asia. With a U.S. style of business, strong intellectual property protection, a small, easy to navigate market, an English-speaking society, and virtually no corruption, Singapore is a great regional trading hub.
U.S. companies will find attractive market opportunities in Singapore for the following best prospects sectors: aircraft and parts, medical devices, computer hardware and software, laboratory and scientific instruments, environment control equipment, oil & gas, telecommunication equipment, education.
Following are major infrastructure projects, significant government procurements and business opportunities:
$500 million second LNG terminal is being planned.
$150 million construction of very large floating structures to store oil and petroleum products; decision is expected by end 2014.
$280 million blueprint to grow the clean energy industry in Singapore.
Construction of a new 300-bed hospital for infectious disease slated for completion by 2018 and a new $135 million National Heart Center Building;
Construction of up to 25 public nursing homes by 2020, and four public acute medical care hospitals and up to 12 polyclinics by 2030;
Private medical groups will spend more than $406 million to build, expand and upgrade their healthcare facilities;
Construction of Singapore Changi Airport Terminal 4 and Terminal 5;
$944 million of Singapore government information technology tenders in the Financial Year 2014 (April 2014 – March 2015).
Using agents or distributors is a common and effective way to serve the Singapore market and, from here, other countries in Southeast Asia. Many distributors in Singapore deal not only with the local market but also with the broader regional market. Establishing a distributor in Singapore is an excellent way to start looking at the wider Asian market. It is important for U.S. firms to visit their representatives, maintain a good relationship with them and respond quickly to inquiries. Prospective exporters to Singapore should be aware that competition is high and that buyers expect good after-sales service. When business warrants, many companies have found it useful and sometimes necessary to set up offices in Singapore. Singapore is home to over 3,000 American firms, most of which serve the regional market.