All countries will suffer if trust is broken and 'tit-for-tat' trade wars break out: PM Lee

All countries will suffer if trust is broken and 'tit-for-tat' trade wars break out: PM Lee

pm lee australia
Prime Minister Lee Hsien Loong and Australian Prime Minister Malcolm Turnbull talk during their media conference in Sydney on Mar 16, 2018. (Photo: Reuters/David Gray)

SINGAPORE: All countries, big or small, will suffer if "tit-for-tat" trade wars break out, said Prime Minister Lee Hsien Loong in a written interview with Australian media.

Mr Lee, who is on an official visit to Sydney until Sunday, was responding to questions about his view on the United States’ decision last week to impose tariffs on steel and aluminium to protect American producers.

In his written responses which were released on Thursday (Mar 15), Mr Lee said it is clear that the Trump administration has taken a “radically different approach” towards trade, and Singapore has been impacted.

"Beyond their direct impact, these trade measures have set a precedent, and other countries will be under pressure to retaliate," he said. "If trust is broken and tit-for-tat trade wars break out, all countries, big or small, will suffer."

Singapore, as a small nation with an open economy, is “a firm believer” in free trade and an "open, rules-based multilateral trading system", said Mr Lee. 

He added that the country was therefore pleased with the recent signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - a new version of the Trans-Pacific Partnership that does not include the United States.

When asked whether he thought the US would eventually join the free trade agreement, Mr Lee said: “The door is open for the US, China and other countries to join when they are ready to meet the CPTPP’s standards. I hope the US will find its way to join one day, though I do not realistically expect that to happen soon.”

In the interview with FairFax Media and The Australian, Mr Lee was also asked about Singapore's support for China's Belt and Road Initiative (BRI), and whether he thought Australia should join.

The BRI, which is aimed at facilitating trade and investment flows between China and other countries, is a "positive" comprehensive strategic plan, said Mr Lee.

"China aims to continue growing its influence, and to become a powerful country by 2050. This is a legitimate ambition," he said. "The BRI is a way to help this happen peacefully and through win-win cooperation with China’s neighbours."

However, the prime minister added that countries should look at BRI projects individually on their merits and assess whether it makes sense to be part of them.

TERRORIST ATTACK COULD HAVE “RAMIFICATIONS ACROSS SOUTHEAST ASIA”

The prime minister was also asked about regional security and the possibility of an "influx" of Islamic State fighters returning to Southeast Asia after being forced out of Syria and Iraq.

Islamic State has "targeted its propaganda at Southeast Asia", said Mr Lee, pointing out several propaganda videos released by the terrorist group that featured Southeast Asian fighters, including one Singaporean.

"The danger of a successful terrorist attack is not only to life and limb, but also the social fabric," said Mr Lee. "Many Southeast Asian countries are multi-racial and multi-religious. The damage to societal trust and inter-communal ties would be hard to repair."

"It could have ramifications across Southeast Asia, including Singapore, even if we ourselves are not attacked."

SINGAPORE-AUSTRALIA RELATIONS “STRONG, MULTI-FACETED”

Mr Lee also spoke about the "strong and multi-faceted" relations between Australia and Singapore.

He pointed to the "deep" bilateral defence ties, with the armed forces of both countries having conducted exercises “frequently”, and Singapore will invest up to A$2.25 billion (S$2.32 billion) to jointly develop training areas and facilities in Queensland.

In terms of economic cooperation, Mr Lee described the two countries as “like-minded partners”. He noted the upgraded Singapore-Australia Free Trade Agreement, and both countries’ commitment to the CPTPP.

When asked what Singapore and Australia can do together to resolve tensions in the South China Sea and make the region more stable, Mr Lee said: “As non-claimant states, it is not possible for Australia or Singapore to solve the problems of the South China Sea.

“Interested states can help keep the situation under control by observing international law and international norms, and agreeing to rules which minimise the risk of incidents and escalation.”

Mr Lee noted that tensions in the South China Sea have “cooled down somewhat” over the past year, and that regular exchanges between ASEAN and China have created a more conducive environment for dialogue and cooperation.

He also pointed out that negotiations have started on a Code of Conduct in the South China Sea.

In this respect, it is also important that the ASEAN stays "cohesive and relevant", Mr Lee added.

“As ASEAN Chair and country coordinator for ASEAN-China relations, Singapore will work with all parties to find common ground so that we can manage the disputes and overlapping claims,” said the prime minister.

He also added that from the region's perspective, the most critical issue was the political and strategic resolve of the US to "project a reliable and constructive presence as a Pacific power.

During his visit to Australia, Mr Lee will attend the Singapore-Australia Leaders’ Summit, an annual meeting established under the 2015 Singapore-Australia Comprehensive Strategic Partnership. He will also attend the ASEAN-Australia Special Summit from Mar 17 to 18 and meet overseas Singaporeans in Sydney.

Mr Lee and Australian Prime Minister Malcolm Turnbull are expected to discuss issues including the progress of the partnership, regional developments and Singapore’s ASEAN chairmanship.

Source: CNA/nc

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