PORT MORESBY, Papua New Guinea: The United States and China need to deal with the specific issues at the heart of their trade dispute and work out practical solutions to those problems, said Prime Minister Lee Hsien Loong on Sunday (Nov 18).
Both countries also need to realise that they have to accommodate one another in order to resolve the row, Mr Lee told the media at the end of the Asia-Pacific Economic Cooperation (APEC) Summit.
He said the US and China cannot see their trade dispute as a “manifestation of a fundamental contradiction”.
“Because then the question becomes, why should I make any concession? If I do, you’ll push me further and if you do, I’ll push you further,” Mr Lee said.
“And so we are at an impasse and straightaway, what could possibly be avoided becomes crystallised, actualised, happens now. And we become at loggerheads.”
Mr Lee said the tensions between the world’s two largest economies need to be treated as “specified, practical trade issues”.
“Then I think it is possible for the trade negotiators, for the economic ministers on both sides, to deal with the specific issues at hand. Presume good faith and good intentions on the other party and work out practical solutions to those problems,” he said.
“Can it be done? It’s a chicken and egg problem. We need some trust to get started. You do it, you get more trust.
“But really, it depends on both countries realising that they have to accommodate one another, that it’s a big world and both are big powers, and they have to live with one another because if they quarrel, it’s going to be a loss for both sides.”
Mr Lee added that Singapore and other economies in the region will be implicated “considerably” as well.
“Nobody knows, because if you go down this path, the consequences are not just trade, but really the overall relationship and the difference between a world where the major powers are accommodating one another, and a world where the major powers are at odds with one another. It’s not quantifiable in GDP terms,” he said.
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Mr Lee’s remarks came as the US and China continue to ratchet up the pressure on one another.
Chinese President Xi Jinping had warned that the shadow of protectionism and unilateralism was hanging over global growth as he called on nations to uphold a multilateral trading system led by the World Trade Organization.
US Vice President Mike Pence retorted by insisting that there will be no end to American tariffs unless Beijing reverses its “unfair trade practices”.
All eyes will be on US President Donald Trump and Chinese President Xi when they discuss trade on the sidelines of a Group of 20 summit in Argentina later this month. Mr Lee said much will depend on the outcomes that arise from that meeting.
Mr Lee said that he, along with the other APEC leaders, hope that the trade that has helped the region to prosper will not be disrupted and for the tensions between the world’s two largest economies to be resolved amicably.
On Sunday, Mr Lee also addressed APEC leaders at the APEC Leaders’ Meeting Retreat and a working lunch.
He said APEC’s leadership is needed more than ever, against the backdrop of mounting pressures on multilateralism and free trade.
He said it is important for APEC member economies to set the global direction and encourage other economies across the world to follow APEC’s example of working together, rather than “going it alone”.
Mr Lee also called for leaders to continue efforts in working towards the eventual realisation of a Free Trade Area of the Asia-Pacific (FTAAP).
DIGITALISATION OF TRADE
Apart from that, Mr Lee said APEC’s leadership can also have a positive influence on the digitalisation of trade.
He said this can be achieved by updating current trade rules to accommodate more new transactions and consumers, and support small and medium enterprises’ efforts in going digital.
Mr Lee told reporters in his wrap-up interview that it is good to know that despite “the thunder and lightning in the background from the trade frictions”, the economies in the region are still keen to work with one another on various fronts, such as education and adjusting to the digital economy.
On that front, Mr Lee said more can be done by APEC to advocate standards and promote interoperability in areas like e-payments, digital identity, digital standards and the approach to artificial intelligence.
However, Mr Lee said such developments need to be inclusive as well.
“Within each country, you want to make sure that everybody is part of this, you don’t want to have certain segments that can’t afford a phone and therefore can’t go online, or who don’t know how to operate a phone and therefore, feel left out.”
In Singapore, it is not just digitalisation that is harnessed but innovation and technology as well.
Mr Lee said at the APEC Leaders’ working lunch that Singapore is keeping ahead by systematically rolling this out for the nation’s future economy, sector by sector.
But this rate of change could leave workers vulnerable.
“Older workers worry that they are not able to pick up new skills fast enough to keep up. Even the younger ones are concerned that technology will render them unemployable in the future.”
Mr Lee said the Singapore government’s role is to help equip the people with the skills and confidence to thrive going forward – through, for example, focusing on education for students and adults, and reskilling workers.