Risk of destabilising global trading system if US adopts anti-trade policies, says PM Lee
LIMA, PERU – A United States that detaches itself from the world’s economy will risk unsettling the global trading system that it has helped nurture and foster over the decades, Prime Minister Lee Hsien Loong said on Friday (Nov 19).
“It’s the engine pushing for freer trade for many years,” he said, noting that the US pushed for economic integration from the 1960s to 1990s, and also played a crucial role in establishing institutions such as the World Trade Organisation.
If the US withdraws from globalisation, economies can promote growth in Europe and Asia, “but you’re missing out on a huge opportunity if America is not part of the story”.
“And it’s not only missing out on the positive, but risking a very big negative in terms of destabilising the global trading and strategic system,” he added.
Mr James Soh, Executive Director of the National Youth Achievement Award Council (centre) presents Mrs Lee with a cookbook after PM Lee and Mrs Lee met with some Singaporean youth on the sidelines of the Apec summit in Lima, Peru. ST PHOTO: CAROLINE CHIA
Mr Lee was speaking as part of a panel on global economic growth during the Asia-Pacific Economic Cooperation (Apec) CEO Summit and responding to a question on how the world can adapt if US president-elect Donald Trump implements anti-trade policies.
Mr Trump had campaigned on an anti-globalisation platform and won support from lower- and middle-income white voters whose incomes have not gone up despite economic growth fuelled by free trade.
When an audience member asked about how people can be better educated about the benefits of globalisation, Mr Lee said it was not just a matter of education but “also a matter of making sure the reality reflects the rhetoric”.
But this is not the case for many in the so-called Rust Belt region of the US, where long-term economic decline set in as its once-powerful industrial sector faded.
To help young people feel hopeful about the future, “you’ve got to put investments in, put programmes in, and it can’t be boondoggled, they have really to work”.
“Otherwise if we tell them it’s all for the best and you are just part of the necessary sorrow in this best of possible worlds, I don’t think you are going to win very many votes,” he said.
During the panel discussion, Mr Lee also said Singapore maintains its business-friendly regulatory environment through “two complementary almost contradictory points” – ensuring stability and yet staying nimble during times of change.
Investors who sink their money into Singapore have to know what to expect and know that agreements will be honoured over many terms of government.
On the other hand, when technology disrupt industrial norms, as seen in the rise of AirBnb and Uber, the authorities must recognise that old rules are no longer relevant and come up with a new framework.
“To believe that old rules can apply without any change to a new world is unrealistic, but to live like some of the new acolytes proclaim, that regulations are now totally unnecessary and we can just move forth and do a free for all, and everybody will thrive and be happy. I don’t think that’s correct either,” he said.
Mr Lee also said that Singapore welcomes the One Belt, One Road initiative as China seeks to develop its trade routes and economic integration with its neighbours.
“We think it’s the right way for China to engage with the world,” he said, noting that Singapore was one of the first countries to state its intention to join the China-backed Asian Infrastructure Investment Bank.
Still, Mr Lee added that the nature of today’s global network is such that “however strong an economy is, not all roads will lead only there”.
“It is important we understand that in this new world there is no country which is the middle kingdom,” he said.