Home Framework Singapore set to join US-led ‘forward-looking’ Indo-Pacific economic framework (PM Lee)

Singapore set to join US-led ‘forward-looking’ Indo-Pacific economic framework (PM Lee)

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SINGAPORE — Singapore is set to join an economic framework for the Indo-Pacific region to be launched by the United States this week, with Prime Minister Lee Hsien Loong saying it reflects an “intention to cooperate on economic issues that are relevant” for the Region.

“Singapore is considering joining. It’s not quite a substitute for the TPP, but it’s a forward-looking scheme,” Mr Lee said, referring to the Trans-Pacific Partnership – a free-trade agreement. exchange from which the Donald Trump administration withdrew in 2017.

“We support her because it is a valuable sign that the Biden administration understands the importance of economic diplomacy in Asia. And we hope that one day the political situation in America will allow them to start talking about a deal again. free trade in one form or another and talk about market access.

Mr Lee made the comments in an interview with Japanese media outlet Nikkei Asia on Friday May 20, which came about a week after he said Singapore welcomed the framework.

During the interview, he was also asked about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), China’s engagement in the region and the Russian-Ukrainian war – a subject he had discussed during of his stay in the United States last month – as well as the global economy and inflation.

Scheduled to be launched by US President Joe Biden on Monday, the indo-pacific economic framework is part of the US economic strategy in the region and has been touted by analysts as a way to counter Chinese influence in the region.

The framework will negotiate areas in four economic “pillars”: fair and resilient trade, supply chain resilience, clean energy and anti-corruption.

Although the details of the framework have not been negotiated, Singapore “will try to come up with something as substantial and mutually beneficial as possible,” Lee said.

Singapore is willing to negotiate in the areas of digital economy, green economy cooperation, sustainable energy, sustainable finance and carbon trading rules, he added.

Besides Singapore, other countries like Thailand, South Korea and Japan have also said they will join the framework negotiations.

Singapore would prefer the United States to enter into a free trade agreement with Asian countries, but the framework proposed by the United States reflects an intention to cooperate on economic issues relevant to the region, Lee said.

“(The framework) includes supply chains, digital economy, green economy cooperation; these are positive things that interest countries in the region and keep the United States engaged, it is why we support them,” he added.

CPTPP MEMBERSHIP BASED ON CONSENSUS

China and Taiwan’s membership in the CPTPP, which Singapore currently chairs, will be decided by consensus among current members, Lee said, in response to a question on how Singapore would handle their applications.

“It means that the president will consult with the member economies, and they will have their views, and if there is a consensus to start the membership process, it will begin,” Lee explained.

The CPTPP is a free trade agreement between 11 countries that succeeded the TPP after the exit of the United States.

China and Taiwan applied to join the agreement last September.

Mr Lee said he expects the consultation to take some time as members have differing views and may first have separate discussions with China and Taiwan before briefing Singapore on their position.

CHINESE ENGAGEMENT IN THE REGION

Responding to a question about the balance of economic and military power in the region, Lee said countries in the region “generally welcome” trade with China as they want to take advantage of the opportunities offered by China’s growth.

Lee said China is consistently engaging in the region, including through its Belt and Road Initiative, a development project linking Asia and Europe, and the Global Initiative. for development aimed at supporting developing countries through international cooperation.

Singapore supports these commitments and is also a member of the Group of Friends of the Global Initiative for Development, Lee said.

“We think that’s positive, because it’s much better for China to thrive and engage in the region, rather than operating alone, outside the rules that apply to everyone, not properly integrated and coordinated with the rest of the region,” Lee said.

“Or that he is fruitless, poor and troubled. It can also cause a lot of hardship for the region.

RUSSIAN-UKRAINE WAR

Regarding the Russian-Ukrainian war, Mr Lee said that portraying the conflict as ‘democracy versus autocracy’ or ‘good versus evil’ will lead to endless war and is unwise. decision to be made.

What is at stake is the international rule of law and the Charter of the United Nations (UN), which is why Singapore is taking a stand against the war, he added.

The United Nations General Assembly’s overwhelming vote to condemn the invasion of Ukraine shows that the countries of the world stand up for the international order, Lee said.

It is also important for countries to respect existing international frameworks such as institutions like the UN or the International Monetary Fund, Lee said, responding to a question about what steps can be taken to maintain the order based on rules.

Second, countries must also abide by the international rule of law such as the UN Charter and the UN Convention on the Law of the Sea, he said.

Third, Mr. Lee said that the international community should not only depend on rules, but also on a balance of power between different forces and work with different interests.

Indeed, countries have some areas in which they can cooperate, but other areas in which they can balance each other.

“In that balance, it’s possible for many other countries to find a perch and work with multiple parties,” Lee said.

“DRASTIC MEASURES” NEEDED TO REDUCE INFLATION

But even before the war, the generous and continued use of stimulus as US and European economies visibly recover from the Covid-19 pandemic contributed to a spike in inflation, Lee said.

Banks want to keep inflation under control, but the difficulty now is that inflation is quite high, he added.

As such, “drastic measures” are needed to bring inflation down and prevent inflationary expectations from taking hold, even at the risk of triggering a recession, he said.

“You will have to take this risk because if you don’t act against inflation, it will become a very serious problem for the world,” Mr Lee said.

For Asia, especially emerging economies, another issue is food and fuel prices, which Lee said will cause them inflation as well as hardship.

“Some countries are in crisis, for example Sri Lanka. But there are specific problems there,” he said.

“Overall, I think emerging markets will experience economic difficulties in their societies, but the judgment is that we are unlikely to have an emerging market financial crisis.”