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Singapore United States
By the 1980s, the United States had become Singapore's
most
important trading partner and, as such, crucial to the
country's
welfare. Singaporean officials often stated that a 1
percent drop
in the United States economy had a 1.4 percent effect on
Singapore's gross national product
(
GNP--see Glossary).
Consequently, in the 1980s Singapore was critically
concerned about
protectionist policies and budget deficits in the United
States. In
1988 Singapore's total exports to the United States
amounted to
S$18.8 billion, up 28 percent over the previous year, and
accounted
for 24 percent of the nation's total exports. Of that
total, about
80 percent were Singaporean manufactures, including disk
drives,
integrated circuits, semiconductors, parts for data
processing
machines, television sets, radios and radio cassette
players, and
clothing. Reexports to the United States also were an
important
part of the trade. Singapore's exports to the United
States
outstripped its imports from there, although the United
States was,
after Japan, Singapore's second largest supplier.
Until 1989 Singapore and the three other NIEs enjoyed
trade
preferences with the United States under the United States
Generalized System of Preferences
(
GSP--see Glossary).
This system
was originally instituted to aid developing economies, but
in 1989,
the four Asian NIEs were removed from the program because
of what
some observers have seen as their major advances in
economic
development and improvements in trade competitiveness. The
United
States had been trying for some time to wrest trade and
currency
concessions from all four countries (but primarily South
Korea),
which had not been forthcoming. Although Washington
presented the
decision more as an economic graduation ceremony,
observers noted
that the move reflected United States frustration over its
continuing trade deficit despite considerable devaluation
in the
United States dollar.
The removal of the GSP affected less than 15 percent of
Singapore's exports to the United States, among them
telephones,
office machines, wood furniture, and medical instruments,
which
faced duties of 5 to 10 percent. Ironically, United States
firms
based in Singapore were among the hardest hit. More than
50 percent
of Singapore's exports to the United States came from
American
firms with operations there, such as ATandT, Digital
Equipment,
Hewlett-Packard, Rockwell International, and Travenol
Laboratories.
Singaporean companies, as well as Japanese and European
firms with
operations in Singapore, were also affected by the removal
of the
GSP. In early 1988, some 4,000 NTUC members gathered
outside the
United States Embassy in Singapore to protest the
decision, and the
Singaporean government expressed regret.
Data as of December 1989
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