Minister (Trade) Lim Hng Kiang's oral reply to PQ on impact of US' TPP withdrawal on Singapore's economy and trade

​Questions:

Mr Ang Wei Neng: To ask the Minister for Trade and Industry (Trade) what is the impact on Singapore's economy in the wake of the challenging global trade situation including the US' intention to pull out of the Trans-Pacific Partnership (TPP), the threat of a trade war between the US and China and increasing calls for protectionism by many developed countries.

Assoc Prof Randolph Tan: To ask the Minister for Trade and Industry (Trade) whether the Ministry has a strategy to deal with the potential impact to Singapore's trade from the decision by the new US administration to pull out of the Trans-Pacific Partnership.

Mr Pritam Singh: To ask the Minister for Trade and Industry (Trade) (a) whether the Government will continue to pursue the Trans-Pacific Partnership (TPP) with like-minded countries; and (b) what is the Government's assessment of the efficacy of the TPP without the participation of the United States.

Oral Reply (to be attributed to Minister (Trade) Lim Hng Kiang)

1.Madam Speaker, can I have your permission to answer questions 11, 12 and 13 together.

2.We are witnessing a rise in anti-globalisation sentiments in Europe and the United States. If protectionist approaches become the norm or a trade war between major economies ensues, global trade will be adversely affected, with knock-on effects on economic growth worldwide. 

3.Small and open economies like Singapore are especially vulnerable. Protectionist barriers to trade, would curtail Singapore’s ability to tap on demand in export markets or serve as an intermediary for global trade flows. This would have an adverse impact on our economy, of which two thirds of our GDP is driven by external demand.

4.On the other hand, our external linkages can also make us more resilient in facing these headwinds. Over the years, we have carefully built up our regional and global connectivity with multiple regions across the world. We have also developed an efficient, stable, pro-business environment, with effective and consistent business and investment frameworks. This allows us to tap on the growth opportunities in Asia and elsewhere, for mutual benefit with like-minded partners. Amidst the current rise of anti-trade sentiments, Singapore will stay the course to remain open and connected, to be an attractive global city that welcomes the best companies, talent and investments. 

5.We remain firmly committed to pursuing a rules-based global trading system and achieving greater regional integration. We will do our part to ensure that markets remain open, so that companies in Singapore can continue to scale and internationalise.

6.The agreement that the Trans-Pacific Partnership (TPP) parties negotiated was one of several such pathways to achieve stronger trade linkages that will promote growth opportunities and job creation in the member countries. With the US’ withdrawal, the TPP agreement as signed cannot come into effect. This is a setback for the global trade liberalising agenda but need not be the ultimate outcome.  Each TPP partner will now have to carefully study the new balance of benefits without the US' participation, and consider the value of an agreement among the remaining 11 partners.  In addition to consulting with other TPP partners to find a mutually beneficial pathway forward, Singapore is also actively engaged in other regional integration initiatives such as the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN Economic Community (AEC). 

7          Madam Speaker, we will also continue to work with like-minded partners at the World Trade Organisation (WTO) as advocates of a rules-based multilateral trading system. On the bilateral front, Singapore has an existing network of 21 Free Trade Agreements (FTAs) in force, including with eight TPP countries, and the US. These speak to our deep ties with key trading partners and will help us stay connected as the environment evolves. We will also actively pursue other forms of economic cooperation initiatives, including industrial parks and other projects in the region, to create more opportunities for our companies to collaborate and grow. 

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