U.S.-Singapore FTA was signed in 2003 and came into force in 2004. After more than 5 years, surprisingly little attention was given to the practical saving potential companies can, and are utilizing from the pact.
Much of attention was given to country of origin effects of the ISI part of the agreement, where specific goods may be considered originating goods for purposes of the agreement when shipped between the U.S. and Singapore, regardless of whether they satisfy the applicable rule of origin. Among criticized effects are labor and IPR rights, investment flows to the surrounding region, externalities for the South East Asian IT and medical sectors.
Country of origin effects, under ISI, are less paramount than Merchandise Processing Fee (MPF) savings. Under 9999.00.84 (statistical provision for ISI), origin of the country is still reported (see sample shot of the entry summary). However, if the product subject to ISI provision, was not transshipped through Singapore, MPF in the amount of 0.21 percent of the declared merchandise would have to be paid (up to $485 per entry). It is worth noting that ISI qualified goods, enumerated under subsection (m) of the HTSUS (see GN p.201), are generally duty free items, which tend to be high value and low cube commodities. Therefore, if volumes justify it, it may be a good business strategy to transship goods through Singapore to capitalize on MPF.
