Written by : Davi Rafa Radhitya Pandi, Della Melsiana Sastra Sasmita
Taylor Swift announced on 20 June 2023, about her Eras Tour dates which revealed six concerts of the show taking place in the 55,000 capacity National Stadium in Singapore from March 2-9 with a two-day break on March 5-6. The shows in Singapore have been her sole Asian performance aside from Japan. Over 300,000 tickets have already been sold, with numerous overseas fans making the trip to watch her live shows. The announcement sparked outrage in Southeast Asia after allegations that it had entered into an exclusive arrangement with superstar entertainer Taylor Swift to host her exclusive concert in the region by paying SGD 24 million– a move that brought accusations of unfair competitions, sparking a firestorm of criticism.
On 16 February 2024, Thailand’s Prime Minister, Srettha Thavisin revealed that Anschutz Entertainment Group (“AEG”) had struck an agreement with Taylor Swift restricting her Eras Tour to Singapore alone. The Prime Minister claimed that AEG had informed him, accusing that the Singapore Government had offered a substantial sum ranging from USD 2-3 million per show as a subsidy in return for exclusive rights in Southeast Asia. However, Minister for Culture, Community and Youth, Edwin Tong, in parliament on 4 March 2024, reported to Channel News Asia (“CNA”) that the figure was not as high as claimed. Thus, CNA understands it to be closer to USD 2-3 million for all 6 shows, not per show as the Prime Minister said.
This brought accusations of unfair competitions in the region for effectively shutting other Southeast Asian nations out, depriving the opportunity to receive tourists that Swift’s concerts bring in, straining relationships within the Association of Southeast Asian Nations (“ASEAN”). Unlike some of its neighbors who waited for the tour announcement, Singapore acted swiftly for the lucrative potential of hosting a global pop icon. News reports revealed that a Singaporean delegation, spearheaded by Minister for Culture, Community and Youth, Edwin Tong, flew to Los Angeles well before any international dates were announced.
According to Maybank’s macro research director, Erica Tay, the concerts by the American pop sensation Taylor Swift are expected to generate USD 371.9 million (SGD 500 million) in return to Singapore’s economy in the first quarter, assuming 70% of the concert attendees come from overseas. Taylor Swift’s influence herself has generated Singapore 25% of F1 Grand Prix’s tourism receipts in only 6 days since 2008. Edmund Ong, the General Manager of Singapore, revealed that the total number of bookings related to Singapore during the concert period of 1-9 March 2024 has increased by 275%, compared to the same period two weeks earlier. Accounting that tourists also spend additional amounts for flights, hotel stays, accommodation bookings, transportation, food, beverages, attractions, and tour bookings boosted during the concert period, have each surged from 10% to even a quintuple 462%. Given that the Singaporean government imposes a 9% tax on all goods and services, tourist spending contributes to the national coffers as well. This spending spree translates to revenue flowing back to the government, making it more than just a concert - it's a strategic investment.
Unsurprisingly, missing out on both the economic jackpot and the intangible perks have left a sour note among some of Singapore’s neighbors as noted by the MPs who noticed tensions from regional neighbours to Singapore at the parliament. Aside from the disappointed Prime Minister who expressed regret and unhappiness, a member of Philippine House of Representatives, Joey Salceda, also expressed dissatisfaction with the deal, viewing it as unbecoming of a good neighboring relationship. He has implored the Department of Foreign Affairs to seek clarification from the Singaporean Embassy regarding the deal.
On 5 March 2024, in a press conference in Melbourne, Prime Minister Lee Hsien Loong defended the deal, acknowledging and confirming that Swift had received undisclosed sum of ‘certain incentives’ from the country’s pandemic tourism recovery fund, although details remained elusive. “I don't see that as being unfriendly,” Lee quoted.
In response, the Philippine representative stated that the country disregarded the ‘law of a neighborhood’ for ‘law of the jungle’. The law of neighborhood is a concept that posits that allies should support one another, maintain solidarity, and accord based on shared expectations. The subjects must conduct themselves reasonably and avoid inflicting harm on their companions or those in the vicinity by showing consideration for their well-being. Meanwhile, the law of the jungle indicates that ‘the weak must do what it can, but the strong can do what it wants.’ The principle is based on survival of the fittest, suggests that the strongest will triumph and always has its way, disregarding others for success.
The practice of making exclusive deals with specific countries is said to go against the principles and values of solidarity and consensus. Such a practice, Salceda said, is not “what good neighbors do.” The principle of good neighborhood is a fundamental principle of international law, if not the oldest principle of international law, emphasizing the necessity for states to reconcile their interests with those of their neighbors in a manner that promotes peace and cooperation. The United Nations Charter explicitly states that good neighborliness as a basis for their policies regarding non-self-governing territories for the need to consider the interests and well-being of the broader international community in social, economic, and commercial matters. It is to exercise caution and act reasonably to prevent actions or omissions that could potentially harm the neighbors, as well as those who are closely and directly affected by your actions that you should reasonably be considered by.
So does the claim that this grant from Singapore to Taylor Swift, which essentially acts as a government subsidy to her, violated international competition law hold any merit? First, it must be noted that there does not exist a unifying hard international competition law which binds states. Instead, international competition law is made up of a combination of domestic laws, soft law in the form of guidelines and recommendations by international organizations such as the Organization for Economic Co-Operation and Development (“OECD”) and the International Competition Network (“ICN”), and existing provisions within international agreements that govern trade between countries. Specifically, due to the nature of the grant, amounting to a subsidy, special regard must be given to the WTO’s Agreement on Subsidies and Countervailing Measures (“SCM”) which governs Singapore’s ability to give subsidies without affecting the interests of the rest of the international community.
Therefore, the first question that needs to be solved is what is considered a subsidy under this agreement and whether Singapore’s grant to Taylor Swift falls under its scope. Under Article 1.1(a), the agreement states that a subsidy exists when “there is a financial contribution by a government or any public body within the territory of a Member”. Originally this article was interpreted to mean that the agreement only applies to subsidies which are granted within the territory of the country granting the subsidy for its goods. However, with the advent of an increasingly globalized world, subsidies have now taken on increasingly extraterritorial elements, causing the rise of “transnational subsidies” which means “government subsidization of a firm outside of its territory”, and for a long period, it was unclear whether this falls under the ambit of the SCM Agreement. This is because of the convoluted nature of the phrase “within the territory of a member”, which has been the subject of debate regarding whether this article governs the location of the recipient of the subsidy as well. Such an understanding will be crucial to determining the status and legality of Singapore’s subsidies, as it is essentially a transnational subsidy Singapore made to someone outside of their territory.
A common interpretation that has been forwarded and that will be used in this article is that Article 1.1(a) only seeks to impose a territorial limit on the granter of the subsidy, i.e. that the granter must be a government or body within a member state, but does not seek to impose that same limitation on the location of the financial contribution, meaning that the recipient of that contribution does not have to be in the territory of that member giving it. Furthermore, under Article 1.2, the subsidy must confer a benefit. When it comes to a simple case of a cash grant to a recipient, that already shows the existence of a benefit and a clear valuation of it.
Subsidies under the SCM Agreement also take two forms: prohibited subsidies and actionable subsidies. Under Article 3, prohibited subsidies consist only of subsidies on export performance (“export subsidies”) and subsidies that are conditioned on the use of domestic goods over imported goods (“local content subsidies”). The second form of subsidies are actionable subsidies that are governed by Article 5, which are subsidies that are not prohibited but may be subject to a challenge through dispute settlement or countervailing action by a state that adversely affects the interest of that state. The contradiction comes in with Article 2 which refers to what can be considered actionable subsidies which the article states as “specific to an enterprise or industry or group of enterprises or industries (referred to in this Agreement as "certain enterprises") within the jurisdiction of the granting authority.” The term jurisdiction refers to “the power of a state under international law to regulate or otherwise impact upon people, property, and circumstances.” This jurisdictional clause only applies to actional subsidies, meaning that it only applies to non-prohibited subsidies that nevertheless still adversely affect other state’s interests under Article 5 and not towards subsidies falling under the scope of Article 3.
This shows an apparent contradiction with Article 1.1(a) of the SCM Agreement, as Article 2’s jurisdictional element necessarily imposes a de facto territorial limitation; that the recipients of the financial contribution must be under the jurisdiction of the member state granting that subsidy. Therefore, the subsidies granted as part of these exclusivity agreements with Taylor Swift, which has to be noted may not be as high as figures on the Internet have said according to Minister for Culture Edwin Tong, do not fall under the scope of SCM Agreement. The STB (Singapore Tourism Board) had albeit offered these grants as a form of financial contribution to Taylor Swift’s Concert promoter AEG which conferred a clear benefit. Yet the problem arises when the subsidies are applied under Article 2 of the SCM Agreement, because while the recipient AEG may have been a specific enterprise under Article 2.1(a), they are not located within the jurisdiction of the Government of Singapore, the government which has control over the granting body (STB) that gave the subsidies and neither does it have the same nationality. Thus by default, the lack of jurisdiction prevents this subsidy from being governed by the SCM Agreement.
This WTO discussion is under the context of the large global scale of international trade. On a more regional note, the Taylor Swift Concert has attracted the ire of Singapore’s ASEAN neighbors, who are all bound to the ASEAN Charter and the most recent form of trade agreement in the region, the ASEAN Trade in Services Agreement (“ATISA”). The international norm that governs relations in ASEAN is the Basic Principle of Consensus-Building and Consultation, which is embedded in the ASEAN Charter. This operating principle incorporates the reasoning that the region’s interest as a whole should be part of each state’s national interest and through this, that compromise be found between member states. This principle is followed through in subsequent ASEAN agreements, such as the Trade in Services Agreement, in which Article 14 provides that member states governance of their trade in services must be transparent, meaning that they must allow stakeholders to access accurate, easy-to-access and relevant information about their regulations and practices.
Singapore’s exclusive deal with Taylor Swift may have been contrary to the transparency clause in the Trade in Services Agreement as it was done without the knowledge of the other member states. In this case, though, it doesn’t seem likely that any state would conduct dispute settlement proceedings under ASEAN or the WTO over this issue, especially as the economies of the other member states were not particularly hurt by Singapore’s actions, only that they had unfortunately missed out on hosting the extremely popular Taylor Swift concerts. The only plausible act a state may conduct and which has been a suggested course of action is sending a diplomatic communication in the form of a note verbale to Singapore for acting contrary to principles of Consensus and Consultations amongst all member states by acting individually to secure exclusive rights to Taylor Swift.
This lighter sort of action indicates that this issue seems to be more of regional diplomacy and countries feeling left out from possible economic benefits that would come with a Taylor Swift concert. Taylor Swift's global appeal is undeniable. Not only is she arguably the biggest pop star on the planet, her legions of ‘Swifties’ bring in economic benefits in the form of ancillary income to the places where her concerts are held, a term which has been coined as “Swifteconomics”. The case at hand here may be up to debate but there’s no clear indication that there was a clear violation of WTO regulations. Prime Minister Lee Hsien Loong of Singapore said it best, “Sometimes one country makes a deal, sometimes another country does. I don’t explicitly say ‘you will come here only on condition that you’ll not go to other places,’” Places have already bid for these types of deals before Taylor Swift and it is not uncommon for these exclusive arrangements to be made with certain cities and venues. Perth had done this before when the Western Australian government secured exclusive domestic rights to Coldplay concerts.
This type of exclusive deal has also been seen to increase competition for musical acts, with Indonesia’s Coordinating Minister of Maritime and Investment Affairs Luhut Binsar Pandjaitan suggesting that Indonesia will also compete for artists in a similar vein to Singapore, and even Joey Salceda, the Filipino Lawmaker at the forefront of criticizing Singapore admitted it was a good move and urged the Philippines government to be more aggressive in securing concert-related talent.
In conclusion, this whole issue may cause a standard for how states will compete for musical acts in the future, whether this triggers bad blood between states, causing exclusivity wars as different states aggressively push to have artists solely perform in their country, thus reducing opportunities for concert-goers to see their artists in their home country and therefore spend higher amounts on traveling or if countries shake it off and create an environment which proliferates a healthy, burgeoning competitive market for musical acts and concerts, with states bringing in artists who may not have come without these exclusive arrangements.
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