Speech by Prime Minister Goh Chok Tong at the signing of the Joint Declaration on the Mexico-Singapore Free Trade Agreement

SPEECH BY PRIME MINSTER GOH CHOK TONG AT THE SIGNING OF THE JOINT DECLARATION ON THE MEXICO-SINGAPORE FREE TRADE AGREEMENT ON MONDAY, 13 NOVEMBER 2000, AT THE ISTANA AT 11.15AM

Your Excellency President Zedillo

Ladies and Gentlemen

President Zedillo and I first discussed the idea of a Free Trade Agreement (FTA) between Mexico and Singapore during the APEC Leaders' Meeting in Auckland last year. Since then, both our countries have made much progress in our individual FTA efforts, not just between us, but also with other like-minded countries.

Mexico and Singapore are active FTA players

2 Mexico has concluded FTAs with the EU, Israel, the Northern Triangle consisting of Guatemala, El Salvador and Honduras, and more recently, the European Free Trade Area or EFTA. I congratulate President Zedillo for these successes.

3 Singapore has also made good progress with several important partners. Earlier this year, we successfully concluded our FTA negotiations with New Zealand. We have agreed with Japan to commence FTA negotiations next year and to conclude it by December. We are also exploring bilateral FTAs with Australia and Canada.

4 Singapore believes that these FTAs will reinforce our efforts in the WTO to create a freer global trading environment. So long as the FTAs are WTO-consistent, WTO-plus and open to membership by other economies, they will lead to positive, competitive liberalisation. Cross-regional FTAs such as this one between our two countries also help to bridge traditional geographical and political divides, and reduce the possibility of regions turning inwards.

Strategic alliance between Mexico and Singapore

5 Your Excellency, the Mexico-Singapore FTA is unique for both of us. For Singapore, it will be our first FTA with a partner across the Pacific. For Mexico, it will be the first FTA with Asia. The Mexico-Singapore FTA will build an alliance between two countries across the Pacific Ocean. It will reinforce the growing links between Latin America and East Asia.

6 Contacts between Latin America and East Asia have so far been sparse and sporadic. Last year, only 2.6% of exports from East Asia went to Latin America, while Latin America exported only 6.4% of its products to East Asia. The figures are low, considering that Latin America and East Asia are today among the most economically dynamic regions in the world. East Asia is staging a strong comeback from the recent financial crisis. There are therefore great opportunities to be exploited. Those who recognise the potential early will reap the most benefits.

7 Mexico can be Singapore's base for the Latin America market. Likewise, Singapore can be Mexico's base in Asia. We are both important trading countries in our respective regions and can tap each other's business and logistics networks.

8 We already have a good foundation to build upon. Singapore is the third largest Asian investor in Mexico, after Japan and Korea. Our cumulative investment in Mexico has reached US$138 million, and continues to rise. Between 1988 and 1999, bilateral trade grew at an impressive rate of 30% a year, even throughout the years of the regional financial crisis. Overall, Singapore is Mexico's second largest export market in Asia, after Japan. In 1998, Mexico exported more electronics to Singapore than to the rest of East Asia combined. Annual trade is now well over US$1 billion a year.

Status of negotiations

9 Since the start of our FTA negotiations in July this year, I understand that the officials have met four times. I am encouraged by the progress.

10 The negotiations were not without difficulties. And there will be many more tough issues to resolve. But they are surmountable, so long as the political leadership remains committed to the FTA and believes in the benefits it will bring both our countries.

11 Through the FTA discussions, we have also generated greater people-to-people interaction between our two countries. We have got to know each other better. Our negotiators have established a good working relationship.

12 After a few trips to Mexico, Singapore negotiators now not only have a much better understanding of Mexico's economic structure, but also its rich history, culture and I am told, beers. I hope that our Mexican friends have also learnt more about Singapore through the FTA process. I was told that many of the Mexican negotiators like the food in Singapore, especially our chilli crabs.

Joint declaration

13 Ladies and gentlemen, the Joint Declaration on the Mexico-Singapore Free Trade Agreement which I have just signed with President Zedillo, sets out what has been agreed to by our negotiators thus far, and what work remains to be done. But more importantly, it marks the start of a long-term strategic partnership between Mexico and Singapore. It will strengthen bilateral ties and help to build a lasting friendship.

14 President Zedillo, we have laid the foundation for this new partnership between our two countries. I look forward to the early conclusion of this important FTA with the new Administration.
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