As soon as the agreement comes into force, Singapore will apply zero tariffs on all U.S. products, including beer and stout — the only goods subject to customs protection (Article 2.2, Appendix 2C). Similarly, U.S. tariffs on 92% of Singapore`s goods will be eliminated immediately, with the remaining tariffs maturing over an eight-year period (Annex 2B). Among the sectors most beneficial to Singapore are electronics, chemicals and petrochemicals, measuring instruments, processed food products and mineral products. The last issue negotiated in the free trade agreement concerns the control of capital outflows and their relationship to the dispute settlement mechanism. During the 1997/99 Asian financial crisis, capital fled short-term countries such as Thailand and South Korea, and their governments were unable to defend their exchange rates. Not only did portfolio investors lose the value of assets when stock markets in these countries fell, but if they could not convert their investments into local currency into dollars, they also lost when the currency depreciated. In addition to foreign investors, local asset holders have been quick to convert their liquid capital into foreign currency.
As a result, the Thai baht and the South Korean won lost 40% of their value in a short time, while the Indonesian rupee fell by almost 70%. In the free trade negotiations on capital controls, the Singapore government would have wanted to maintain political leeway to contain these catastrophic losses in the event of a future crisis. As Singapore is already already a free trade state, much of the negotiations on the free trade agreement focused on access to its services markets. The free trade agreement provides significant market access for the entire service sector of the other, subject to certain exceptions that must be made in writing — the so-called negative list approach (Chapter 8). Exceptions include sectors that generally require certifications or public licenses (lawyers, accountants), public institutions (airports, social security services, public hospitals, public bodies) or national policies (nuclear energy). Appendix C lists the areas reserved by each country. As the implementation bill and the ESTV agreement cannot be amended, the house of representatives and Senate finance committees, as well as the House of Representatives and Senate Justice Committees, have made non-markups with administration representatives as witnesses to make changes to the draft enforcement legislation.