Trade in goods, i.e. tariff elimination, also is a less significant element in U.S.-Singapore Free Trade
Agreement. Singapore is to apply zero tariffs immediately on all U.S. products, including beer and stout --
the only items that has been subject to tariff protection. U.S. tariffs on 92 percent of Singaporean goods are
also to be eliminated immediately with remaining tariffs phased out over eight years. Singapore also agreed
to allow the importation of chewing gum (banned since 1992) from the U.S. with therapeutic value for sale
and supply subject to laws and regulations relating to health products. The ROO provision in the agreement
stipulates that only exports with substantial transformation and value added done in Singapore can be
conferred “Singapore origin” and qualify for the FTA tariff rates. A major controversy in the U.S. itself is
with regard to the rules of origin in textile and garments and the issue of whether they might become a
precedent for other trade agreements (Nanto, 2003). The controversy did not lead to formal rejection
because it was noted that U.S. import quotas in textiles and apparel are due to be eliminated anyway on 1
January 2005 under the WTO agreement. Moreover, Singapore is not a major trading partner in the textile
and apparel sector. The yarn forward rule of origin requires that products be made from U.S. and/or
Singaporean originating yarn, with limited exceptions. For imports into the U.S., all other assembly
processes must be carried out in Singapore.