U.S. Singapore Free Trade Agreement

House Approves Free Trade Agreements with Singapore, Chile

Strong backing not affected by labor opposition to trade deals

By Andrzej Zwaniecki
Washington File Staff Writer

July 24, 2003

Washington -- The House of Representatives July 24 approved by a wide margin free trade agreements (FTAs) with Singapore and Chile, trade deals likely to serve as a catalyst for future free trade initiatives.

The House first voted 272-155 to pass a bill implementing the agreement with Singapore and later approved by a 270-156 vote a similar measure concerning the FTA with Chile.

"These are world-class free trade agreements, and one of the things we can say is, it's about time," Chairman of the House and Means Committee Bill Thomas said before the measures were passed.

U.S. Trade Representative Robert Zoellick said a day before the vote that the two trade deals he helped to negotiate are "only a start" on broader U.S. efforts to expand free trade relationships to other countries and regions.

The Chile and Singapore FTAs are the first agreements negotiated under the 2002 law on trade promotion authority (TPA), otherwise known as fast track. Under TPA, Congress restricts itself to approve or reject a negotiated trade agreement, within strict time limits and without amendments.

The Senate could vote on both agreements next week, according to news reports.

The House approved the bills despite strong opposition from organized labor groups, which say that inadequate labor provisions in both agreements set a bad precedent for future FTAs. Labor leaders said that although Chile and Singapore have relatively good standards on protecting worker rights and the environment and ways of enforcing those standards, this might not be the case with other countries seeking similar trade deals.

Representatives of the AFL/CIO and other labor groups lobbied House Democrats strongly in a last-minute attempt to hold down the number of "yes" votes, arguing that limited support for the current FTAs would give their party more leverage to demand stronger labor and environmental provisions in future trade agreements, including the one currently negotiated with five Central American countries. But while Democrats opposed to the trade deals were able to delay by a day consideration of the bills, they failed to garner much support among their colleagues. Cal Dooley, Democrat from California who backed the FTAs, said July 23 that key Democratic lawmakers in the House reached compromise on labor and environmental issues with the USTR.

Zoellick said that both deals are innovative and offer new approaches to difficult trade issues, including "state-of-the-art" protections for digital products and electronic commerce and stronger protection for intellectual property.

In addition, under the Singapore FTA all U.S. goods and less sensitive products from Singapore would gain duty-free status in bilateral trade immediately, with remaining tariffs on the most sensitive Singapore products phased-out over a ten-year period. The deal provides the "broadest possible" trade liberalization in services and strong protection for investors, the Office of the USTR said.

Singapore is the United States' 12th largest trading partner, with two-way trade of goods and services (exports plus imports) approaching $40 billion in 2002.

Under the Chile FTA, more than 85 percent of bilateral trade in consumer and industrial goods would start being traded freely immediately, with most remaining duties eliminated in four years. The agreement also offers new access for U.S. service companies and "ground-breaking" anti-corruption measures in government contracting, the office said.

Two-way trade in goods between the United States and Chile totaled $6.4 billion in 2002. Two-way trade in services in 2001 (latest year available) amounted to $2.2 billion.