Singapore's strategic location on the Strait of Malacca has made it the entrepôt for exchange between Europe and Southeast Asia. The 1967 formation of the Association of Southeast Asian Nations (ASEAN) by Singapore, Malaysia, Indonesia, Thailand, and the Philippines sets the stage for regional cooperation.
Dependence on Britain declines, and the United States and Japan emerge as major sources of industrial products. Malaysia and Indonesia still supply raw materials such as rubber, tin, and spices. Singapore becomes a major oil-refining center, weathering global oil crises in 1973 and 1979. ASEAN member ties strengthen with Indochina's fall to communism and Vietnam's invasion of Cambodia.
Powered by machinery and transportation equipment, its principal exports, and buoyed by the success of its new electronics industries, Singapore's total exports grow an average of 5.5 percent each year. A worldwide recession in 1985 slows demand for the country's exports, especially computer parts and petroleum products.
Exports to the United States surpass imports. Eighty percent of the exports -- mainly computer, machinery, and electronics -- are manufactured in Singapore, more than half by American firms with factories there. Japan is the single largest supplier, with 25 percent of total imports. Singapore becomes China's fifth largest trading partner and a major investor in the Chinese economy.
A practitioner and longtime advocate of liberalized trading policies, Singapore proselytizes in the region through both ASEAN and the APEC (Asia Pacific Economic Cooperation) organization. A founding member of the World Trade Organization, Singapore hosts the first WTO Ministerial in 1996.
Singapore's trade balance reaches a surplus of $10 billion in 2000. The U.S. remains its single largest trading partner, followed by Malaysia, Hong Kong, and Japan. Principal exports include machinery, petroleum products, chemicals, and garments. Largely duty-free imports and exports, streamlined customs procedures, and liberal tax continue to bolster trade and attract foreign investment.
Singapore agitates for an ASEAN Free Trade Zone (AFTA) and unveils its intention to create bilateral free-trade arrangements with Australia, Canada, Japan, and the United States. Unrest in Indonesia, the Philippines, and Thailand underscores Singapore's reputation as the most stable country in the region, but the government sees a great challenge in competition from new WTO member China.
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