BANGKOK – Economies have to work together towards transparent rules for global trade amid a more challenging landscape, said Prime Minister Lee Hsien Loong on Saturday.
While there is a need for new rules or an update of existing ones, till there is agreement on these moves, economies should abide by existing rules or it will be the law of the jungle, he added.
“Apec is one of the places where we can discuss these things and maintain engagement, and at least keep talking to one another while we solve the problems,” he said in an interview with Singapore media after the 29th Asia-Pacific Economic Cooperation (Apec) Economic Leaders’ Meeting ended.
Asked how increasing geopolitical tensions have affected economic integration and growth, PM Lee said it will be a “very long time” before a free trade zone spanning the whole of the Asia Pacific can happen, but the need to cooperate with one another on a more limited scale towards the ideal of free trade is possible.
It is important for economies to keep on talking, with an emphasis on trade and the need for rules for countries to work together, said PM Lee.
While the old mindset is that freer trade is better, today, some may think that national security or resilience is better, he added. “It’s a different perspective, but it doesn’t mean we don’t need rules.”
At the summit in Bangkok earlier on Saturday, PM Lee told fellow leaders that globalisation and economic cooperation remain important – even if they have to be moderated by other valid concerns – if economies are to prosper.
He called on economies to continue to work towards Apec’s core objective of trade and investment liberalisation and facilitation. He also said it was timely that this year’s host, Thailand, had started a refreshed conversation on the Free Trade Area of the Asia-Pacific which Apec leaders had agreed to work towards.
The geopolitical context has changed substantially, hindering Apec from achieving its full potential, he noted. But even in a more complicated world, there remains a need for a strong, rules-based trading system, he said.
Calling for an update to the World Trade Organisation, he said: “Even economies that are at odds with one another, and that intervene to promote industrial policy and nurture national champions, will benefit from a sound multilateral framework, instead of the anarchic law of the jungle.”
PM Lee noted that Apec was formed in 1989 at a time when globalisation was intensifying, economies were deepening economic cooperation and barriers to international trade were falling. Apec provided an important platform to champion free and open trade and investment as well as promote regional economic integration.
The grouping’s 21 member economies today account for close to half of global trade and more than 60 per cent of the world’s gross domestic product.
More than 30 years later, the global situation has changed, with the war in Ukraine posing a major threat to the global order, noted PM Lee. Other troubling trends include growing rivalry and mutual distrust between major economies, national security considerations trumping economic arguments, the bifurcation of technology, and principles of market efficiency, equal treatment and fair competition taking a back seat to considerations of supply chain resilience and technological dominance.