Free Trade Agreement With Singapore

Title IV of P. 1417/H.R. 2739 also amended the INA to include citizens of Singapore as E-1 contract distributors and E-2 contract investors. Some trade diversions are possible under the free trade agreement. Manufacturers currently producing elsewhere in Asia could move to Singapore. However, given that Singapore`s per capita income is $20,600, the average hourly cost of labor is $7.73 (compared to $5.55 in Taipei), Taiwan, $1.12 in Bangkok, Thailand, and $0.64 in Guangzhou) and office occupancy is 67% higher than in Guangzhou and 330% higher than in Bangkok (49), it seems unlikely that a large number of factories will move to Singapore, to take advantage of the benefits of the free trade agreement. However, attempts to illegally transship regional producers could increase. The free trade agreement is addressing this potential problem by strengthening customs procedures. The non-implementation phase [Article 20(7)] of the dispute settlement procedure is slightly different for labour and environmental cases. Until a dispute settlement body publishes its report, but the non-partisan party does not implement it, the procedures are the same regardless of the nature of the complaint. In the event that a panel of Parties finds that a Party has not complied with its labour obligations (Article 17(2)(1)(a) or environmental obligations (Article 18(2)(1)(a)) and that the Parties (a) are unable to reach agreement on a solution or (b) have agreed on a solution; however, the complaining party considers that the other party has not complied with the terms of the agreement and that the complaining party may request that the panel reconst meet to impose annual monetary taxation on the other party. The body must set the amount of monetary investment at $15 million per year within 90 days of its renewal (adjusted for inflation after 2004 by the United States Producer Price Index). Some have argued that $15 million is too small.

Note that, for other types of disputes, money market investments are set at a level equal to 50% of the benefits that the dispute resolution body has deemed equivalent or, in the absence of such a finding, 50% of the amount proposed by the complaining party for suspension. If the monetary tax is not paid, the complaining party may suspend the tariff services of the agreement up to the level set by the authority. In 2002, the United States imposed tariffs of $87.5 million on imports from Singapore. . . .

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