Sin­ga­pore ap­peals for unity on trade rules


The Nation - - AEC -

PLANS for re­gional deals such as the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship ( RCEP) and China's Belt and Road Ini­tia­tive (BRI) need great care in their ex­e­cu­tion, said Sin­ga­pore Fi­nance Min­is­ter Heng Swee Keat in a public di­a­logue yes­ter­day.

“I feel very strongly that glob­al­i­sa­tion will need to be de­fended, and we need to do our best to sup­port that,” he said in a di­a­logue ses­sion at the Sin­ga­pore In­sti­tute of In­ter­na­tional Af­fairs (SIIA) think tank’s 11th Asean & Asia Forum, at the Ritz- Carl­ton Mil­len­nia Sin­ga­pore.

Heng called on agree­ments and dis­pute res­o­lu­tions to be done through es­tab­lished in­ter­na­tional chan­nels, re­it­er­at­ing Sin­ga­pore lead­ers’ strong ad­vo­cacy for a rules­based, mul­ti­lat­eral trad­ing sys­tem.

“I’m glad that the re­gion con­tin­ues to up­hold the im­por­tance of re­gional in­te­gra­tion,” he said, adding that, in the wake of the agree­ments that have been penned be­tween Asean and other economies, “what we can do next is to re­ally bring to­gether these agree­ments into the RCEP”, which he said “will be a very, very ma­jor group­ing”.

“I hope that it does not lead to a frag­men­ta­tion of the world into ma­jor trad­ing blocs. The idea is not that. But, based on our own ex­pe­ri­ence with free trade agree­ments, re­gional agree­ments, bi­lat­eral agree­ments are im­por­tant build­ing blocks for a broader in­ter­na­tional agree­ment.

“And our hope must con­tinue to be, on the WTO, on the Doha route, try­ing to build there and see how we can do it,” Heng said, re­fer­ring to the Doha De­vel­op­ment Agenda, or the World Trade Or­gan­i­sa­tion (WTO) trade ne­go­ti­a­tion talks launched in Qatar in 2001.

“But in the process of do­ing bi­lat­eral agree­ments and re­gional agree­ments, we learn how to make struc­tural changes in our econ­omy. We learn how to co-op­er­ate bet­ter. We learn how to set­tle dis­putes. And that build-up of con­fi­dence will al­low us to do more.”

Fresh talks

Asked by di­a­logue mod­er­a­tor and SIIA chair­man Si­mon Tay about how Sin­ga­pore and Asean could re­spond if trade re­la­tions be­tween the United States and China de­te­ri­o­rate, Heng cited the re­cent news re­ports of fresh US ne­go­ti­a­tions over the dis­puted North Amer­i­can Free Trade Agree­ment with Mex­ico and Canada.

“I hope that things don’t take a turn for the worse. And I must say that I do hope that some agree­ments can be reached . . . In fact, the trade dis­pute is not just be­tween China and the US, but also the US and many other coun­tries,” he said.

Econ­o­mists agree that tar­iff and re­tal­ia­tory mea­sures are not the fix for dis­sat­is­fac­tion over trade sur­pluses or deficits, said Heng.

“I do think that the right so­lu­tion is to make full use of the WTO and solve many of these is­sues, and on a bi­lat­eral ba­sis, to re­ally iron out this prob­lem. A trade dis­pute that es­ca­lates into a global trade war will be nega­tive for every­one, in­clud­ing the coun­try that starts it,” he said.

“So I think we’ve got to take great care to pro­tect the global trad­ing sys­tem, the mul­ti­lat­eral, rules- based sys­tem that has got proper mech­a­nisms for set­tling dis­putes.

“Now, I’m not say­ing that it’s the per­fect sys­tem to­day . . . but I do think that we can, we must, set­tle dis­agree­ments over a broader forum and not on a bi­lat­eral ba­sis.”

He com­pared Asean and the wider Asian re­gion to a hawker cen­tre with an ar­ray of food stalls and said that the goal is to have a sit­u­a­tion where “each of us spe­cialises in par­tic­u­lar ar­eas and the group­ing as a whole be­comes at­trac­tive”.

“The ques­tion is, at the end of it, where are the com­pet­i­tive ad­van­tages of dif­fer­ent na­tions. And I think we all need to work to­gether to ad­dress com­mon chal­lenges,” he said.

As for non- tar­iff mea­sures to fa­cil­i­tate re­gional trade, Heng said that cer­tain ar­eas could ben­e­fit from com­mon stan­dards and rec­i­proc­ity among mem­ber states, es­pe­cially if pol­i­cy­mak­ers be­gin where there is greater in­ter­est “and, when it works, you can do more”.

“The eas­i­est part of trade agree­ments is on tar­iffs, be­cause every­one un­der­stands it,” he said. Tak­ing food safety as an ex­am­ple of non-tar­iff trade con­cerns, he said: “You do have coun­tries with dif­fer­ent stan­dards of reg­u­lat­ing food, you have dif­fer­ent de­grees of com­pli­ance and so on . . . The way for­ward is to build ca­pac­ity in our reg­u­la­tory au­thor­ity.”

Heng also said the BRI is “a good project - it is a good set of ideas”, but “what re­ally needs a lot of care is the ex­e­cu­tion", lest un­re­lated projects be billed as part of the BRI.

“But in terms of the in­tent of the project and its strate­gic goal that can be achieved, I think it is sig­nif­i­cant,” he said.

“And what we should do in the re­gion is to wel­come in­vest­ments from all over the world,” he added - whether it is from “tra­di­tional sources” like the United States and Japan, or new and emerg­ing economies, in­clud­ing in­traAsean in­vest­ment. “That’s how Sin­ga­pore it­self has grown over the last 53 years.”

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