URUGUAY ROUND OF GATT AND WTO (Ratification of acceptance by Parliament)

Dr Kanwaljit Soin asked the Minister for Trade and Industry why Singapore's acceptance of the Uruguay Round of the General Agreement on Tariffs and Trade and the World Trade Organisation need not be ratified by Parliament.

The Deputy Prime Minister (BG Lee Hsien Loong): Mr Speaker, Sir, under Singapore's system of government, the Cabinet has the authority to enter into international treaties on behalf of the Republic. Hence, the Cabinet approved the signing and ratification of the Agreement establishing the World Trade Organisation.

The WTO Agreement encompasses a whole host of agreements covering various areas of world trade. A review of the various agreements forming part of the WTO Agreement is underway to identify the changes we need to make to our laws to bring them into conformity with our obligations under the WTO Agreement. Parliament's approval for the amending legislation will be sought in due course.

Mr Chiam See Tong: Sir, how does the ratification of WTO affect Singapore's position in regard to the free trade area that Singapore is going to enter in 2010, under an APEC agreement? How do these two reconcile with each other?

BG Lee Hsien Loong: Mr Speaker, Sir, firstly, under the existing GATT arrangements, there are rules which allow certain types of free trade agreements to be legitimate under GATT. So if your legislation complies with the GATT rules, then you may set up a free trade area. I imagine, although I am not a trade lawyer, that the same will apply under the WTO.

Secondly, Mr Chiam may be mistaken in thinking that we are going to set up an APEC free trade area in 2010. The goal is APEC free trade in 2010. A free trade area connotes specific legislation, hard commitment, precise organisational arrangements. APEC free trade is an ideal. It can be done informally, it can be done unilaterally. How it will be done will be discussed in due course. But there is no commitment to set up a free trade area.