Yesterday
the Singapore government announced further measures to cool the city-state’s
property market. Among the measures are
a 5 percent stamp duty for permanent residents on their first purchase of
property (up from 0 percent), and a 10 percent stamp duty for their second
or subsequent purchases of property (up from 3 percent). Stamp duty on foreigners was increased from
10 percent to 15 percent. Singapore nationals are not subject to these
measures (but they are subject to other property market cooling measures).
However, as
I wrote in 2011, the US-Singapore FTA and EFTA-Singapore FTA should give
American, Swiss, Lichtenstein, Norwegian and Icelandic nationals the same
treatment as Singapore nationals. This
is because of the national treatment and most-favored nation clauses in those
FTAs, even if the nationals are permanent residents.
The continuing adjustments
to the property stamp duty once again demonstrate that FTAs function both to
expand market access and to protect market access. In this case, the US and EFTA FTAs with
Singapore insure against potential government policy changes adverse to these countries' interests (which is a major rationale for the US to negotiate a double taxation
treaty with Singapore, something I’ve heard about since I moved here in 1997). I will be very interested to see whether the
EU managed to secure similar national treatment and most-favored nation
obligations in its FTA with Singapore. That is something that China, Korea,
Japan, India, Australia-New Zealand and other countries did not manage to get
from Singapore in their FTAs, but the US and EFTA countries did.
This development is another
reminder that FTAs are about more than just trade, but also encompass all forms
of economic regulation, including investment.
The initial benefits may come from increased trade, but the continuing
benefits (and corresponding obligations) in other parts of the economy will
apply for years to come.
