Strength in numbers: Regional integration key to domestic growth, says MTI minister

Asia is the middleman as world superpowers recover.

Asia is caught in a game of giants, as the United States continues its recovery and China shifts towards consumption-driven growth. Strong economic partnerships between countries in the region are key to remain relevant in this scenario, says Minister for Trade and Industry Lim Hng Kiang.

In a speech at the OCBC Global Treasury Regional Forum on Friday, Lim stressed that stronger economic partnerships and trade liberalisation is an imperative if the region wants to see more jobs, higher real wages and better standards of living overall for citizens.

“For Singapore, the US is our largest investor, and China our largest trading partner. The same may be said of many countries in this region. But as American companies innovate and create new products and services, and as China moves towards emphasizing domestic consumption over investment and exports, Asian economies are going to have to restructure ourselves to stay relevant on this new global stage,” he noted.

Here’s more from Lim’s speech:

Jobs and growth are at the heart of the regional free trade agreements that are currently being negotiated. The Trans Pacific Partnership (TPP), which currently links 12 Parties[1] from either side of the Pacific, will integrate 40 percent of the world’s GDP and one third of world trade.

As a high-quality comprehensive agreement, the TPP will go beyond traditional trade issues such as tariff elimination, to address the challenges faced by modern businesses.

Whether it regards trade in the digital age, where the free and instant flow of information across borders has become the lifeblood of businesses, or in making coherent the many regulatory frameworks that confronts any business belonging to the global supply network, the TPP is an opportunity to update the rules, reshape the economic architecture of this region, and reflect the global trading system of the 21stCentury.

As a participant of both the TPP and RCEP, Singapore’s position is both principled and pragmatic. We support a free and open multilateral trading system, and as a small state, see great value in economic frameworks that are predictable, stable and rules-based.

Being part of these regional trade agreements allow Parties to influence and set the rules of engagement, and minimize the possibility of trade diversion once these agreements come into place. At the same time, participation must equate to meaningful contributions at the table, and translate to practical gains. Certainly, the TPP and RCEP hold many opportunities for all Parties involved.

With our markets integrated, we will be more attractive and competitive. These gains are not without cost, but I remain confident that Parties will value the strategic importance of these agreements, and endure the short term pain of reform in exchange for long term benefits.