TRADE DEVELOPMENT COUNCIL

Mr Ng Kah Ting asked the Minister for Trade and Industry when the Trade Development Council will be set up; whether the private sector will be invited to sit on the Council, and what will be the scope and functions of the Council vis-a-vis increasing trade with the Third World and developed countries.

The Minister for Trade and Industry (Mr Goh Chok Tong): Mr Speaker, Sir, since the Trade Development Council was proposed some three years back, my Ministry has had discussions with representatives of the private sector on the desirability and feasibility of setting up a Council. As a transitional measure, the Trade Development Committee was set up on 1st August, 1978, as a channel for obtaining the contribution of the private sector on trade development programmes. This Committee has now recommended that a Trade Development Board be formed to take over and intensify the functions of the Trade Development Section of the Department of Trade. Its activities are to include:

(i) Promotion of entrepot trade and exports of Singapore products;

(ii) Identification of potential export markets;

(iii) Provision of trade information, e.g., tariffs, licensing and all relevant legal and commercial requirements in importing countries;

(iv) Assistance in organising inward and outward trade missions:

(v) Servicing trade enquiries; and

(vi) Coordinating and directing the activities of overseas trade offices.

The main argument for a statutory board was that it would have greater flexibility and autonomy than a Government department in management, personnel administration and financial matters, and hence would be more effective. The Committee also proposed that the Board be financed through a cess on all trade declarations.

My Ministry, after studying these recommendations, decided that it was not necessary for us to set up a separate body to do what had been done by the Department of Trade and my Ministry all these years. The crucial point is not whether the Board will have more flexibility than the Department of Trade, but whether this flexibility alone is enough to promote trade more effectively than the present methods. Trade expansion ultimately depends on our exporters and manufacturers. It is not possible for a Government organisation, even in the form of an autonomous body like a statutory board, to undertake the task of private enterprises. To export successfully, our manufacturers must have the products to sell, know their markets, and sell. These are not functions which a centralised body can perform well. Secondly, 71% of our exports are undertaken by multinational companies, and they are unlikely to need the services of a Trade Development Board.

Thirdly, it was proposed that the Board should be partly financed from a cess levied on all trade declarations. This is inequitable. Exporters who do not need the services will also have to pay the fees. It will affect their price competitiveness.

My Ministry feels that exporters who cannot sell overseas effectively on their own, either because they are too small or lack the know-how, should make use of international trading companies. Tax incentives have already been given to encourage the formation of multi-activity international trading companies. These are sales oriented companies that will be more effective than a Trade Development Board.

Mr Ng Kah Ting: Mr Speaker, Sir, since 29% of our exports are not undertaken by the MNCs, will the Ministry of Trade and Industry consider some form of assistance to help exporters export their products?

Mr Goh Chok Tong: Mr Speaker, Sir, first of all, not all the 29% will require Government assistance to help them with their exports. They are already exporting on their own. Perhaps a certain percentage of them will require the help of Government agencies. As I have mentioned, there are at present, incentives, the commercial secretary service and other schemes which are run by the Department of Trade to help these exporters export their products.

Dr Augustine H.H. Tan (Whampoa): Mr Speaker, Sir, will the Hon. Minister inform this House in how many countries do we have trade representation abroad?

Mr Goh Chok Tong: Mr Speaker, Sir, I do not have the figures off-hand. Perhaps we could leave this matter till I come to the Budget Statement, when I will be making further statements on the Trade Development Board.

Mr Ng Kah Ting: Sir, I would just like to ask one last question. Since the Hon. Minister for Trade and Industry has clearly stated that the Trade Development Committee has proved very useful in trade development, my question is whether it will continue to be part of his Ministry.

Mr Goh Chok Tong: Sir, the answer is yes, and it will be further strengthened.