Asia Pacific leaders should not foreclose options on free trade: PM Lee

[chahlley]

(Asia Today Monday 21 November 2016)

Asia Pacific leaders should not foreclose options on free trade: PM Lee

Photo: Ministry of Communcations and Information

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Updated: 12:26 PM, November 21, 2016

LIMA (Peru) — Asia Pacific leaders should be careful about foreclosing their options on trade liberalisation, Prime Minister Lee Hsien Loong said on Monday (Nov 21) in response to widespread pessimism about the fate of the Trans-Pacific Partnership (TPP).

Observers have declared the ambitious trade pact, which accounts for about 40 per cent of global output, "dead" following the recent electoral victory of United States President-elect Donald Trump, who ran on an anti-trade platform. Over the weekend, New Zealand Prime Minister John Key said he sensed "tremendous despair" at this year’s Asia-Pacific Economic Cooperation (Apec) meeting.

Mr Lee, however, said he would not characterise the mood at Apec in such gloomy terms. He added that Asia Pacific leaders were in a mood of watchfulness, as they studied the potential policy directions of Mr Trump and his team.

"Now we (world leaders) will have to see how he (Mr Trump) assembles his team and what policies they settle on," Mr Lee told the Singapore media as he wrapped up his visit to Peru to attend the Apec leaders’ meeting.

He said once Mr Trump and his team have studied the problems and weighed the options, there will be more clarity on Washington’s policy directions.

"I think it is a mood of watchfulness, of waiting to see, and being cautious not to foreclose options prematurely, so that you find yourself at a dead end unnecessarily," added Mr Lee.

Commenting on the ratification of the TPP trade pact, which has been stalled due to Mr Trump’s strong opposition to the deal, Mr Lee said Singapore will still push ahead with the ratification process.

"I think many of the countries are going to do that (push ahead with ratification), and then we will see how the Americans decide and how they would like to take it forward," said the Prime Minister.

"If in fact after two years, they (Americans) do not take it forward, well then, we will examine our options again. We still have some time."

The TPP signatory nations are scrambling to save the pact, after Mr Trump vowed to scrap the accord once he takes office in January, claiming that the deal would harm the US economy and cost jobs. The agreement is still pending ratification by all the signatory nations.

Besides Singapore and the US, the others in the pact are Australia, Brunei, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru and Vietnam.

The TPP will take effect 60 days after all 12 countries ratify it. If all the nations have not ratified it in two years, it will enter into force 60 days after at least six countries, accounting for 85 per cent of the combined gross domestic product of the 12 signatories, do so.

Over the weekend, TPP leaders met at the sidelines of Apec and affirmed their intention to continue with their plans to ratify the agreement.

Mr Lee also announced that the Republic is pushing ahead to amend its legislation and bring into effect the TPP by early next year.

Commenting on proposals to renegotiate the TPP, Mr Lee said it will be a difficult undertaking. He noted that the deal has taken around six years of negotiation, with an enormous amount of work and compromises worked out.

"Finally you have a package, a document several thousand pages long. And is valid, you should sign it," he added. "If you do not sign it, time passes, new events develop, new technology, new markets, new economic trends, it becomes harder to sign the agreement and you have to negotiate a new one then. And that is not so easy."