LONDON: Protectionism will damage the multilateral system of trade and investments, and result in strategic rivalry between great powers that can destabilise the world, said Prime Minister Lee Hsien Loong at the Commonwealth Heads of Government Meeting (CHOGM) on Thursday (Apr 19).
That is why it is important for like-minded countries, like those in the Commonwealth, to work together to promote trade and investment, he added.
Mr Lee was addressing leaders from 53 Commonwealth states at an executive session focused on free trade, on the second day of CHOGM in London.
Discussions to encourage free trade is timely, Mr Lee said, especially as the global mood shifts towards protectionism.
An example is the potential trade war brewing between the United States and China, with the former slapping unilateral tariffs on steel and aluminium imports targeted at the latter. Beijing has retaliated.
But Mr Lee noted on Thursday that while countries have their own set of national interests and security concerns to address, they must not become a disguised form of protectionism – a balance must be struck, he said.
Restricting investments can bring about distrust and rivalry, which will result in tit-for-tat actions.
A multilateral approach, on the other hand, is “ideal”, Mr Lee said, because it sets uniform and universal rules of trade, balances the benefits and concerns of participating countries, and provides more scope for trade-offs and win-win solutions.
But he understood the difficulty of reaching multilateral agreements, drawing the example of the failed 2001 Doha Round.
The Doha Round had an ambitious and broad agenda to free up trade and lower trade barriers in agriculture, services and manufactured goods between all members of the World Trade Organisation. Its death was long drawn out because countries were not willing to make concessions. Talks were put to rest after 14 years.
This is why many countries have chosen to pursue regional free trade agreements, said Mr Lee. This includes the recently concluded Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the China-led Regional Comprehensive Economic Partnership which is currently being negotiated.
For Commonwealth members, Mr Lee said they can continue to tap on the “Commonwealth advantage”. Countries share similar regulatory systems, an operating language and business environments.
They also have a common interest in upholding the multilateral trading system, and a common view that a world of greater interdependence is better than one that is locked in trade wars and rivalling blocs, he added.
“Even before the WTO was established, there was a system of ‘imperial preferences’ amongst Commonwealth countries,” Mr Lee noted.
“Commonwealth countries should make the most of this shared outlook to promote trade among ourselves,” he added.
GOVERNMENTS CANNOT TACKLE CLIMATE CHANGE ALONE: PM LEE
Mr Lee also said that Singapore remains committed to helping its Commonwealth counterparts to pursue their United Nations Sustainable Development goals, while working towards meeting its own set of goals.
Addressing leaders at a closed-door CHOGM meeting focused on climate change, he listed some of Singapore’s successes and its efforts to be as green as possible.
For instance, the country is now among the world’s top 20 most carbon-efficient after it made the switch to natural gas, which generates nearly all of the island’s electricity. This is despite the fact that Singapore does not produce green alternatives, and access to affordable and clean energy remains a challenge.
Mr Lee also reaffirmed Singapore’s commitment to address climate change. This includes reducing the country’s emissions intensity by 2030, designating 2018 as the Year of Climate Action, and the implementation of a carbon tax from next year.
But governments cannot deal with climate change alone, Mr Lee noted. To that end, Singapore has done much with other countries, like promoting science and innovation with Commonwealth nations to find creative solutions and technological breakthroughs.
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