Speeches
San Diego Regional Chamber of Commerce and World Trade Council
Breakfast Remarks by Ambassador Patricia L. Herbold
Monday, June 9, 2008
8:00 – 10:00 AM
San Diego Marriott
Good morning everyone. I would like to thank the San Diego Regional Chamber of Commerce and the World Trade Council for having us and the US ASEAN Business Council for organizing this event.
As U.S. Ambassador to Singapore, I’m pleased to be here in San Diego with my colleagues from other U.S. Embassies in Southeast Asia. I hope that together we can help give you a better understanding of recent developments in Southeast Asia and highlight the business opportunities that abound in that dynamic region.
Before we talk about the individual countries to which we represent the United States, I’ve been asked to start off this afternoon by providing a short overview of the Association of Southeast Asian Nations, ASEAN. Incidentally, Singapore happens to be the current ASEAN Chair.
ASEAN
ASEAN turned forty years old on August 8, 2007. The five founding members of ASEAN -- Indonesia, Malaysia, the Philippines, Singapore and Thailand -- have over the years been joined by Brunei, Burma, Cambodia, Laos and Vietnam to bring ASEAN to its current 10-country membership.
As a group, ASEAN looks to accelerate economic growth, social progress and cultural development in the region and to promote regional peace and stability.
America places great value on our close cooperation with ASEAN. During the Asia Pacific Economic Cooperation (APEC) Leaders Meeting in Sydney in September 2007, President Bush highlighted the importance of our ties to ASEAN when he announced that the United States would name an Ambassador to ASEAN. In early May, the Senate confirmed Scot Marciel as the first U.S. Ambassador for ASEAN Affairs. The United States is the first Dialogue Partner of ASEAN to have appointed an Ambassador to ASEAN.
This 40th anniversary year of ASEAN is supposed to be about the future – turning ASEAN into a more cohesive and effective organization, promoting regional integration, and giving ASEAN a greater role on the world stage.
To provide frameworks for achieving these goals, ASEAN leaders launched the ASEAN Charter and the ASEAN Economic Blueprint, which they signed at their Summit Meeting in Singapore last November.
On the economic front, ASEAN is not a common or single market, although its goal is to move in that direction. I think, however, that looking at trade and investment from an ASEAN-wide perspective helps American companies realize the immense opportunities that exist for them in Southeast Asia.
ASEAN’s 570 million people represent a tremendous market for U.S. goods and services. Taken together, ASEAN was our fifth largest goods trading partner in 2007 with exports from the United States of $60.4 billion.
We exported more products to ASEAN than we did to the U.K. or Germany and when comparing ASEAN to other markets in Asia, you find that our exports to ASEAN were over 92% of those to China and nearly as much as those to Japan. On the services side, ASEAN is our 8th largest market, ahead of such markets as China, India and all of Africa.
The importance of ASEAN is not only seen in the trade numbers, but also in the amount of Foreign Direct Investment flowing in both directions. U.S. investment in ASEAN is nearly $100 billion and exceeds the amount we have invested in China, Hong Kong and Taiwan – combined.
In terms of total exports, imports, and FDI, ASEAN is a more important market for the United States than South America.
There are problems among the ASEAN countries, particularly in Burma. At the end of May, the UN estimated that over half the approximately 2.5 million Burmese severely affected by the humanitarian disaster caused by Cyclone Nargis remained in need of assistance. The United States Government is doing its part to help. We has made available over 24 million dollars in humanitarian assistance.
As a whole, Southeast Asia today is a region of enormous energy and hope. The United States will be an important part of its future.
To reach that future, the U.S. Government is working hard to help ASEAN to achieve the goals set out in the ASEAN Charter and the Economic Blueprint.
Doing so is in our own interest, as a stronger and more cohesive ASEAN would help maintain strategic balance in the region and create better access for U.S. business to an expanding ASEAN market.
Singapore
I’d like to start off the next part of my talk by giving you a short snapshot Singapore, where I represent the United States as Ambassador.
Located at the southern tip of the Malay Peninsula, Singapore sits alongside one of the most important shipping lanes in the world, the Strait of Malacca. Location, along with many other factors, has helped this island nation prosper.
Singapore is a small country. The City of San Diego is bigger, in terms of square miles, than Singapore, a city-state with no natural resources that relies on manufacturing, trading and providing services to fuel its economy. (Note FYI: The City of San Diego is 324 square miles, versus 253 square miles for Singapore.)
Singapore is a diverse country. Its over 4.6 million people come from a variety of ethnic and religious backgrounds. Though Singapore is predominantly an ethnic Chinese country, you’ll find significant Malay and Indian populations, as well as a large number of expatriates, including 18,000 Americans.
Singapore is a prosperous country. With a per capita GDP of over $35,000, Singapore is second only to Japan in Asia in its level of development.
Singapore is a good place to do business. Numerous publications and organizations consistently rate Singapore at or near the top of their competitiveness and business indices. In 2007, the World Bank’s ‘Doing Business’ rankings rated Singapore as the easiest country in which to do business.
And, we have a strong relationship with Singapore.
An important pillar of our relationship is trade. On January 1, 2004 the U.S.-Singapore Free Trade Agreement came into effect. This FTA, our first in Asia, has had a profound impact on our bilateral trade. The FTA is seen as model for future FTAs and has served to expand U.S. market access in goods, services, investment, and government procurement. It has also enhanced intellectual property protection and strengthened cooperation in promoting labor rights and the environment.
Since the implementation of the FTA, U.S. exports to Singapore have increased by 58 percent and our trade surplus has grown to nearly $8 billion. In 2007, Singapore was our 11th largest export market for manufactured goods and in 2006 it was our 18th largest market for services. Just to put that number in perspective, in 2007 the U.S. exported more products to Singapore, a country of 4.6 million people, than to Brazil, a country of over 180 million.
I know that San Diego is home to many hi-tech and knowledge-based companies whose intellectual property is key to their success. Thanks in part to the U.S.-Singapore FTA, Singapore boasts one of the top IPR regimes in Asia. I have spoken with numerous American companies in the IT, biotechnology, and medical sectors over the last several years who have told me that strong IPR protection is the number-one reason that they are established in Singapore.
Another area that shows the strength of our bilateral relationship, and one that I know is also near and dear to hearts in San Diego, is military cooperation. Looking briefly at our security relationship, I should explain that we are not allies, but we are strong partners. The United States military leases facilities in Singapore to provide logistical support to our forces transiting and operating in the western Pacific. Singapore has provided air and naval support in Iraq and Afghanistan and has consistently publicly supported our efforts there. We regularly hold high-level strategic policy exchanges and our militaries frequently train and exercise together. In 2001, Singapore completed construction of a new, purpose-built facility designed to berth Nimitz-class carriers and, as a result, I have had the pleasure meeting quite a few of your friends, neighbors and family when they stop in Singapore.
Singapore has positioned itself well as a natural entry point into the region and beyond. With its legacy of the British commercial code, a strong legal system, and widespread use of the English language, Singapore is the Southeast Asian market most similar to the business environment in the United States. Many American multinational corporations and small and medium-sized enterprises have set up their regional operations here, and accumulated U.S. foreign direct investment exceeding US$60 billion, more than twice the amount of FDI U.S. companies have invested in China.
Singapore's high standard of living and comfortable, safe environment, combined with transport facilities that put nearly half of the world’s population within a seven-hour radius, has made the country an important regional hub in key areas such as logistics, communications, information technology, financial services, and management.
However, Singapore does face challenges. It has historically been vulnerable to external shocks, including the Asian Financial Crisis, the Dot Com Bubble and the SARS Epidemic. Each of these events hit this trade-dependent and highly globalized economy especially hard. Singapore’s economic development strategy seeks to promote protection against such external economic shocks by diversifying its manufacturing and services sectors and promoting innovation and knowledge-intensive industries.
Like its neighbors, Singapore is also facing increasing costs of doing business, inflation at a 26-year high and, other problems, such as a shortage of space in international schools, which are beginning to affect companies’ decisions to locate here.
That said, the Singapore economy is incredibly diverse for a country of its size and there are ample opportunities for U.S. companies. If you have any questions about specific projects or sectors, I’d be happy to put you in touch with the right people at the Embassy to counsel you on trade with or investment in Singapore.
Some have quipped that, “If you can do business in Canada, you can do business in Singapore.” Except for the jet lag, I would argue that Singapore may be even easier.
Thank you for your attention this morning.