TRADE/COMMERCIAL OFFICES OVERSEAS (Effectiveness of)

Mr Lim Chee Onn asked the Minister for Finance (a) whether his Ministry has examined the cost-effectiveness of increasing the number of trade or commercial offices located overseas and/or upgrading those already in existence, in order to promote our exports; and (b) what other plans his Ministry has to assist our manufacturers in further diversifying their exports to new markets and in responding quickly to overseas demand for new products.

Mr Goh Chok Tong (for the Minister for Finance): Sir, the Department of Trade has so far established only three overseas trade offices. These are in New York, Bonn and Tokyo, to help Singapore manufacturers gain larger shares of the American, German and Japanese markets. As they have been set up only since 1975. it is too early to assess their precise cost-effectiveness. However, since 1976, our Commercial Secretaries at home and abroad have helped our manufacturers participate in 14 international trade fairs and 11 trade missions abroad. Initial orders received through contacts made at these fairs and during the trade missions amounted to $116 million. Encouraged by these initial successes, more and more of our manufacturers and exporters are making use of the services of our Commercial Secretaries, which can be regarded as an indication of their growing effectiveness. Singapore is becoming increasingly known as an additional and, in some cases, an alternative source of supply in the Far East for manufactured products.

The main limiting factor in increasing or upgrading overseas trade offices is the shortage of well qualified and experienced staff. Newly recruited Commercial Secretaries have to undergo a two-year intensive on-the-job training in the Department of Trade to enable them to understand and appreciate the strength, as well as the weakness, of the products of Singapore industries. Only such knowledge would enable them to effectively serve our manufacturers in finding new markets when they are posted overseas.

The Department of Trade will, however, continue to send small recce missions abroad to investigate the potential of new markets, and only when such potential has been clearly identified, will more new trade offices be established overseas. Such trade offices cost about $150,000 each a year to run.

In answer to part (b), this year, more trade missions will be sent to the major existing markets in the USA, the European Economic Community (EEC), Japan and West Asia, where demand exists for high quality products. Teams will also be sent to investigate market potential in Africa, the Pacific Islands and Latin America.

The establishment of overseas trade offices is only one of several instruments used in promoting our exports in existing and new markets. The Monetary Authority of Singapore (MAS) offers export financing at attractive rates under the MAS Export Re-discounting Scheme, while the Export Credit Insurance Corporation of Singapore provides insurance against political and commercial risks.

As indicated in my reply earlier to a Question from the Member for Jalan Kayu, discussions are now currently taking place between the Government and the Joint Standing Committee of the Chambers of Commerce and the Singapore Manufacturers' Association on the establishment of a Trade Development Council. A properly organised and operated Trade Development Council, with close involvement by the private sector, will greatly help in promoting exports.

While the Government will continue to do its best to encourage trade expansion through exports, our efforts must be matched by the active participation of manufacturers and exporters. If the direct marketing effort is lacking, no amount of Government support can make up for it. Some of ,our local manufacturing companies, admittedly too few, have been able to increase their exports to West Asia many fold through selling missions and sheer perseverance. Successful marketing requires an intimate knowledge of the market, which can only be acquired through direct selling by the manufacturer or exporter himself. In the final analysis, it is the tenacious manufacturer, with competitively priced high quality products, who will penetrate and hold new markets.

Dr Augustine Tan: Mr Speaker, Sir, since much has been said about the desirability of promoting exports to West Asian markets, and in view of the fact that the West Asian area is going to be an area of high growth compared to other parts of the world which will be stagnating economically, does the Senior Minister of State not think that it is about time we had a trade or commercial office in West Asia?

Mr Goh Chok Tong: Mr Speaker, Sir, it is in fact about time and we are looking into the matter.