It is important to press ahead and conclude talks for a Trans-Pacific Partnership (TPP) agreement, Prime Minister Lee Hsien Loong said yesterday, as he suggested that the United States' economic footprint in the region could be affected by a failure to do so.
The US-led TPP involving 12 economies from the Asia-Pacific, South-east Asia, Australia and Latin America, has significant economic advantages, including for Washington - which says it wants to have a strategic and significant presence in the Asia-Pacific.
Mr Lee said having a presence "is not just battleships and aircraft carriers and aeroplanes. You have to have trade, goods exchanges... interdependence. And the TPP is your way of doing this". If the US did not do this, it would be "giving the game away", he added.
Mr Lee was responding to a question on negotiations to conclude a TPP free trade deal, which are stalling, and what it would mean for the US in particular, if no agreement is reached.
Noting that promises to reach a deal had been made three years in a row, he said: "I think this is our last chance to fulfil our promise, and if we don't fulfil our promise this year, we will be running into American elections in two years' time, (and) will have further delays of indefinite nature".
For economies involved, the TPP affords advantages, including allowing for regional cumulation.
This means the value-add content of products, which are manufactured in different countries, can be brought together and qualify for benefits like lower tariffs. Hence, a country can enjoy more of the gains from free trade.
Other TPP benefits include electronic commerce and Intellectual Property protection.
"It is a major step forward and a major factor that can contribute to stability and prosperity of the Asia-Pacific. One day, the Chinese may want to join, and before that, the Koreans may also want to join. Then we will have free trade in the Asia-Pacific," he said.
He told the audience that there already were other variations of trade agreements in the region that the US was not party to, adding: "We are all in Asia, interacting and trading with one another. Our trade with China has become the biggest trading partner around the world, bigger than America and bigger even than Europe last year. It hasn't been so for many years, but it is now. It is so for many of the ASEAN countries. Even for Japan, China is the biggest trading partner. Even for South Korea.
"So, you don't promote trade, what are you promoting? What does it mean when you say you are a Pacific power? It just does not make sense."
Lawmakers in the US Congress have different calculations, he said, but added that there may be a fresh opportunity after American mid-term elections. These are scheduled for November.
Talks on the TPP have been delayed by intricate market access negotiations between Japan and the US. Besides Singapore and the US, other members are Mexico, Canada, Chile, Peru, Australia, New Zealand, Japan, Brunei, Malaysia and Vietnam.
This article was first published on September 21, 2014.
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