Dr Hsien-Hsien Lei, CEO of AmCham Singapore
Mr. Simon Kahn, Chairman of AmCham Board of Governors
Ms Monica Hardy Whaley, President of the National Center for APEC
Mr. Casey Mace, Deputy Chief of Mission, US Embassy to Singapore,
Mr. Manu Bhalla, Alternate Senior Official for APEC, US State Department,
Distinguished Guests,
Good morning.
Introduction
1. First, I would like to start by congratulating AmCham on the significant milestone of your 50th anniversary in Singapore. We are thankful for your longstanding and steadfast partnership and we look forward to strengthening it in the years to come.
2. I am also pleased to join you today for the inaugural AmCham Singapore 2023 Regional Economic Conference. This conference, and its focus on multilateral collaboration is not just timely but also exemplifies the important role that AmCham plays in building understanding and fostering cooperation between Singapore and the US and indeed, the broader global business community.
Setting the Context
3. We convene today at an important juncture in international developments. Even as we emerge from the COVID-19 pandemic, we are witnessing profound challenges to the global order. The global order that has allowed many countries and companies to thrive and prosper, and has helped to raise the living standards of hundreds of millions around the world.
4. The fact is, global trade is slowing.
a. The World Trade Organization (WTO) estimates that global merchandise trade will grow just 1.7% in 2023, which is a significant notch lower than the average growth of the past 12 years, at 2.6%.
5. Support for the multilateral trading system is on the wane. The consensus on its benefits has begun to fray. Geopolitical tensions and the COVID-19 pandemic, as we are all aware, has caused shifts, if not shocks, in supply chains, driving up prices of energy, food and almost everything else. We have seen that elevated global inflation has in turn led to tighter monetary policies, which is dampening economic growth. As a small open economy, Singapore feels these effects keenly.
6. Despite these challenges, or perhaps because of them, now more than ever it is important that we secure the future of global trade. Trade is a powerful engine of growth and that engenders resilience in the global economy. It also serves as a bulwark against protectionism and nativist policies, intertwining the fates of nations for the common global good. I would like to share with you in the next few minutes, some thoughts that I have on how we can reinforce and rejuvenate the global trade agenda.
Strengthening Multilateral Collaboration
7. It starts with the rules-based multilateral trading order, of which the WTO is the institutional bedrock. The WTO and other similar organisations undergirds continued and orderly international trade flows, with rules, enforcement mechanisms and dispute resolution settlement processes.
a. We in Singapore are resolutely committed to multilateral and plurilateral institutions, such as the WTO and Asia Pacific Economic Cooperation (APEC), and the rules-based trading system they engender. They are key to building trust and promoting greater economic collaboration amongst countries.
b. It is therefore critical that we make a concerted effort to strengthen the WTO, by ensuring its effectiveness and its relevance.
8. This is why it is important to build on the substantive outcomes of the 12th WTO Ministerial Conference for the World Trade Organisation to address 21st century issues such as digital trade.
a. On our part, Singapore is one of the co-leads for the Joint Statement Initiative on E-commerce (JSI), along with Australia and Japan. It is a little ironic that in 2023 we’re still trying to develop rules on E-commerce in WTO but this is the reality. The JSI seeks to establish baseline rules on digital trade that will support open digital markets and enable all consumers as well as businesses, big and small, to benefit from the digital economy.
9. We should also leverage other regional platforms whose work complements and supports the WTO. APEC is a good example. It offers member economies a forum to engage in open dialogue, and it also serves as both a testbed and a scaling platform for new ideas.
a. We are an active participant at APEC.
b. In particular, to support the US’ priorities as APEC 2023 host on the digital economy, Singapore is focusing efforts on promoting the transition to electronic customs procedures and paperless trading with APEC economies.
Harnessing New Approaches
10. Secondly, besides strengthening the key institutions of global trade, we must also pioneer novel initiatives to adapt the trading system to changing economic realities, and help countries seize opportunities from emerging growth areas.
11. Two key areas that come to mind are digitalization and sustainability, something that is high on agenda across the World. The need and benefits are clear.
a. The WTO estimates that digitally delivered services account for 13% of world trade and we know that this is set to grow exponentially. Digitalization can make international trade faster, cheaper, and more secure.
b. Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) has found that trade in “green goods” grew by 4% in 2022, defying the downward trend in global merchandise trade. We don’t really need an economic impetus to embark on work on sustainability because it is an existential threat but it is evident that there are clear economic benefits to be had as well.
12. So we must urgently seek out new trade architectures and modalities to harness these opportunities ,and yet preserve flexibility to adapt to their rapid pace of change.
13. We in Singapore have been building a network of Digital Economy Agreements (DEA) and Green Economy Agreements (GEA) with trading partners. These are nimble instruments focused tightly on digital and green issues that are not addressed in traditional trade agreements.
a. We have concluded DEAs with five countries – Chile, New Zealand, Australia, Britain, and South Korea. These agreements establish digital trade rules and digital economy collaborations. We also signed a Digital Partnership Framework with the European Union earlier this year.
b. On the sustainability front, Singapore launched our first GEA with Australia last year. This agreement promotes trade and investment in environmental goods and services, develops interoperable policy frameworks to support green growth sectors, and catalyses the development of green technologies.
14. Beyond such domain-focused initiatives, we should also facilitate innovative trade cooperation models across new geographies.
15. One recent effort in this regard is the Indo-Pacific Economic Framework (IPEF). It is a forward-looking initiative that seeks to advance resilience, sustainability, and inclusiveness, amongst the parties.
a. In contrast to traditional trade agreements, the IPEF adopts a modular approach comprising four separate pillars: trade, supply chains, clean economy, and fair economy.
b. For Singapore, the benefits of IPEF include improved technical assistance, enhanced access through trade facilitation or harmonization of standards, and the promotion of high-standard rules, such as for cross-border data flows, as well as potential cooperation in new areas. I know that many of these topics resonate with those of you in this room and the members of AmCham.
Leveraging Singapore-US Bilateral Relations
16. Thirdly, bilateral cooperation amongst like-minded parties will always remain an important component of a holistic trade agenda.
a. So multilateral domain-based initiatives and new modalities but bilateral partnerships are an important part of this framework. Bilateral partnerships offer greater agility and flexibility to explore new areas of mutual interest and to move faster than regional or multilateral initiatives. These bilateral pathfinders can be used to reinforce momentum or ideas being discussed at other larger platforms.
17. Singapore and the United States are longstanding partners and have explored many firsts together. Our shared commitment to a stable, rules-based global order makes Singapore and the US natural partners.
a. For example, the US-Singapore Free Trade Agreement (USSFTA) was the US’ first FTA with an Asian country. This landmark agreement anchors our strong economic relationship.
b. Bilateral trade has more than doubled since the USSFTA entered into force – from S$98 billion in Sing dollar terms, to S$231 billion in 2021.
18. We are consistently exploring new ways to build on this relationship. In 2021, Singapore and the US signed the Partnership for Growth and Innovation (PGI).
a. This parternship seeks to increase collaboration between Singapore and American businesses by strengthening trade and investment in new and forward-looking areas. We have embarked on four areas as a start: (i) digital economy and smart cities; (ii) advanced manufacturing and supply chains; (iii) clean energy and environmental technologies; and (iv) healthcare.
19. Like the IPEF, the PGI is a strategic pathfinder for Singapore and the US to explore new areas of cooperation. Our governments have worked closely together to promote commerce and trade, and highlight opportunities for our businesses.
a. In October last year, an Advanced Manufacturing Business Development Mission to Singapore and other countries in the region helped facilitate new opportunities for collaboration between Singapore and American businesses.
b. We have also worked jointly to promote standards and rules that advanced technological innovation, allowing companies and individuals to realise the full benefits of the digital economy. This includes expanding membership in the Global Cross-Border Privacy Rules Forum. This Forum was launched in April last year and will help facilitate the flow of cross-border data while protecting personal information.
Role of the Private Sector
20. Finally, in what is an ostensibly government-led effort, businesses like members of AmCham play a critical role. For a start, we need the business community to propagate the benefits of trade agreements and actively avail of the ensuing economic opportunities. This is key if we are to demonstrate the value proposition in tangible terms. But we also need you to provide ideas and suggestions on how we can further refine and improve existing agreements or even embark on completely new ones. Your market proximity and understanding of trends must complement the policies of governance and we have to bring these together and bring them to bear in terms of the trade, architecture and economic connectivity initiatives in the years ahead. Perhaps most importantly, we need you to continue to be strong advocates and champions of trade liberalization and economic connectivity. AmCham can play a pivotal role in all 3 aspects, and in particular, help in strengthening the US’ economic engagement with our region in compliment to the other modalities of engagement you already have.
Conclusion
21. If I may conclude, history has shown that greater collaboration between like-minded partners can yield broad-based economic prosperity. To achieve this, it is important that we deepen engagement at all levels, and adapt trade to new and emerging areas. Traditional templates have limited value or utility in today’s complex global environment; we need innovative, inclusive, and flexible modalities. This is an endeavour in which we need all hands on deck, the government, the private sector and also other stakeholders.
22. I look forward to a fruitful exchange with all of you today, and to hearing your thoughts on how we can achieve this.
23. Thank you for inviting me.