Why US-Singapore Relations Matter

Last week, on the 29th of March, 2022, Singaporean Prime Minister Lee Hsien Loong visited the White House and met with US President Joe Biden.

This visit is arguably a testament to the strength and importance of the US-Singapore relations which has only become more important in recent times.

In this week’s article, we will be looking at the most important aspects of US-Singapore relations. More specifically, the economic, security, educational, manufacturing, and R&D aspects of US-Singapore relations.

Economic Relations

According to the US Department of State, Singapore is the US’ largest trading partner in Southeast Asia and its eighteenth largest trading partner as a whole, whereas the US is Singapore’s largest foreign investor. According to the Office of the United States Trade Representative, Singapore is the US’ 14th largest export destination and the US’ 17th largest import destination in 2020. 

As a testament to strong historic economic relations, the US and Singapore signed a Free Trade Agreement (FTA) in 2004. This FTA has reportedly supported approximately 215,000 jobs in the US and facilitated USD 93 billions’ worth in bilateral trade up to 2020, according to the US Department of State. Moreover, more than 4,500 US-based companies are also registered in Singapore.

Defense and Security Relations

Singapore is also an important regional defence and security partner to the US. Serving as the basis of this partnership are the 2005 US-Singapore Strategic Framework Agreement and the 1990 Memorandum of Understanding (MOU) for the United States Use of Facilities in Singapore. The Congressional Research Service writes the Agreement was the first such agreement with a non-ally since the Cold War had ended.

The MOU facilitates US military access to Singapore military facilities on a rotational basis. As a result, the White House states that approximately 1,000 US service members are based in Singapore whereas 1,000 Singaporean service members are based in the US. Additionally, US Navy maritime surveillance aircraft and littoral combat ships would regularly enter and leave Singaporean waters. In 2019, the MOU was extended for a further 15 years.

Educational Relations

The Singapore Ministry of Foreign Affairs includes educational exchanges as one of the key areas of cooperation between the US and Singapore. “Bilateral cooperation spans many mutually beneficial areas such as cyber-security, counter-terrorism, education, infrastructure, counter-proliferation and a Third Country Training Programme to jointly help developing countries.”

The US International Trade Administration reports that there are approximately 3,558 Singaporean students studying in the US in 2021, a number which has mostly remained consistent for the past decade save for the year 2020. The Administration adds that “Out of the 3,558 students, 43% are pursuing undergraduate courses and 35% pursue graduate courses while the remainder are mainly undergoing practical training.”

Manufacturing Cooperation

Manufacturing is also a key aspect of US-Singapore relations. The Office of the United States Trade Representative states top US exports to Singapore in 2020 included machinery (USD 5.1 billion), electrical machinery (USD 4.1 billion), aircraft (USD 3.5 billion), optical and medical instruments (USD 2.9 billion) whereas top US imports from Singapore included pharmaceuticals (USD 4.3 billion), machinery (USD 3.9 billion), optical and medical instruments (USD 3.6 billion).

Many initiatives have been developed to promote greater cooperation among the two countries. The Business Times reports “the US-Singapore Partnership for Growth and Innovation (PGI)... covers four key pillars: the digital economy, energy and environmental technologies, advanced manufacturing, and healthcare.” The US Department of Commerce has also recently promoted a senior government official-led Advanced Manufacturing Business Development Mission to Singapore with cooperation from the Singapore Ministry of Trade and Investment.

R&D Cooperation

In terms of R&D cooperation, Singapore has always promoted investments in R&D capabilities. According to the US Department of State, the Singaporean Government has created an investment framework to further Singaporean R&D capabilities composed of innovation centres, tax incentives, research grants, and partnership opportunities with various national research agencies. Recently, the White House states that US-Singapore R&D cooperation has centred around green technologies. 

The US-Singapore Climate Partnership, for example, was created to support climate technology and clean energy infrastructure R&D. Private US manufactures also continue to support R&D programmes. The Straits Times reports US-based semiconductor giant Applied Materials will continue to partner with Singapore’s Agency for Science, Technology and Research for the next five years and invest USD 210 million in advanced 3D chip packaging capabilities.

Conclusion

The US and Singapore have a long and established relationship. In fact, Singapore is arguably the US’ most important regional partner. Strong relations revolve around not only economic partnership but also defence and security, educational, manufacturing, and R&D partnerships. It is therefore no surprise that Singapore, as well as Southeast Asia as a whole, has become a prime destination for manufacturers who want to diversify manufacturing operations and overall supply chains.