Singapore signs US trade deal

The two leaders praised each other

The United States has clinched an historic trade agreement with Singapore.

The deal - signed earlier on Tuesday by President George W Bush and Singapore's prime minister Goh Chok Tong - will wipe out tariffs on about $33bn of trade between the two countries annually.

It will also give US banks and companies more access to one of Asia's main financial centres.

Singapore will be the first Asian country to have such an agreement with the US, if it is approved by Congress.

President Bush called the agreement "a crucial step forward for both countries".

He added: "Singapore is a nation that is small in size, but large in influence.

"With this agreement, Singapore becomes an even more valued economic partner of the United States."

Goh Chok Tong, who signed the pact in the White House, called it "an ambitious and comprehensive agreement".

He said it would "enhance our close economic relations (and) also signal the US long-term commitment to engage Southeast Asia and contribute to its development."

The two leaders also praised each other for being staunch allies in the war on terrorism.

Financial services

The United States currently has free-trade relations with Canada, Mexico, Israel and Jordan.

Efforts to complete an agreement with Chile were hampered by that country's criticism of the US-led war in Iraq.

But Mr Bush has said it still remains a priority.

Singapore is America's 11th largest trading partner.

But because it already imposes few import tariffs, the main advantage to the US of Tuesday's agreement will be greater access to Singapore's financial and service sectors.