Bilateral relations between Singapore and the United States stretch back to the 19th century with the US opening a consulate in 1836 when the island nation was still part of Straits Settlements of the British Empire.
Currently, Singapore is the US’ 17th largest trading partner with bilateral trade reaching US$57.8 billion in 2020 — the US has an estimated US$13.5 billion trade surplus. Also, more than 4,500 US companies are registered in Singapore, including Google, Apple, Microsoft, Procter & Gamble, and Pfizer, among others, making the US the largest foreign investor in Singapore (20 percent of all foreign investment into the country), with an estimated US$270 billion in direct investments.
Singapore presents continued opportunities for US businesses, particularly those eyeing expansion into ASEAN, of which Singapore is also a member (other members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, and Vietnam). The ASEAN region is set to become the world’s fourth-largest economy with a consumer market of US$4 trillion and a population of over 600 million.
US vice president Kamala Harris visited Singapore in August 2021, as part of a whistle-stop tour that also included Vietnam. The aim was to increase diplomatic and economic ties in what is becoming one of the world’s most strategically important regions as the US seeks to counter China’s growing influence.
Importantly, Harris extensively discussed supply chain resiliency and security within the context of pandemic management with Singapore’s prime minister Lee Hsien Loong. The Biden administration has been increasingly exploring the benefits of the China + 1 concept and how more investments in Southeast Asia could speed up assembly relocations from China. Singapore can provide the infrastructure and incentives for businesses to establish their regional HQ for expansion into ASEAN.
US-Singapore economic ties run deep, particularly after a free trade agreement (FTA) was signed in 2004 — the first US FTA in Asia — US multinationals alone employ over 200,000 Singaporeans while approximately 36,000 Americans are employed in Singapore.
More recently, in October 2021, both countries signed a memorandum of understanding (MoU) to implement the US-Singapore Partnership for Growth and Innovation agreement. This partnership aims to establish a vehicle to deepen economic integration, starting with four pillar areas: energy and environmental technologies, digital economy, advanced manufacturing, and healthcare.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected]