THE need for free trade has become all the more pressing as the world faces persistently subdued economic growth, Trade and Industry Minister Lim Hng Kiang said last night.
This is as true for major economies as it is for small nations like Singapore, which need to be plugged into the global marketplace to survive, he added.
Mr Lim told the second annual Fullerton Lecture Series that Singapore's fundamental economic policy of openness has ensured it stays relevant as Asia develops.
"As one of the many small states today, policy options remain limited to us, and Singapore will continue to be a staunch advocate of free trade and appropriate vehicles that further this agenda," he noted.
But all countries also have a vested interest in maintaining open markets to set the world economy on a path of sustainable growth, Mr Lim added.
"In these conditions of persistent slow growth, countries need to keep their markets open to ensure that the engines of global growth continue turning."
Mr Lim cited a World Trade Organisation report released earlier this month warning that the Group of 20 major economies are implementing more trade-restrictive measures than trade-facilitating ones, and taking a long time to remove previous trade barriers.
The organisation said countries that take such measures risk prompting "dangerous reactions" by their trade partners.
"The threat of 'currency wars' and competitive devaluations thus continues to cast a pall on the prospects of global economic recovery," Mr Lim cautioned.
Singapore's experience in Asia has shown that having an open economy can allow a country to tap new trade patterns as a growth engine, he added.
The Republic has benefited from the recent shift in global trade towards this part of the world, as inter-Asian trade has grown significantly both in total value and as a proportion of global trade, said Mr Lim.
The region is taking further steps to enhance free trade through regional set-ups, such as the Asean Economic Community 2015, and wider blocs, including the Regional Comprehensive Economic Partnership.
This will be one of the largest free trade areas in the world, combining the markets of Asean, Australia, China, India, Japan, South Korea and New Zealand, Mr Lim said.
Asean is also working on a free trade agreement with Hong Kong, while Singapore is pursuing the multilateral Trans-Pacific Partnership, which includes the United States and will represent one-third of world trade when Japan joins next month, he added.
Singapore hopes that all these trade initiatives will "translate into significant growth opportunities", especially for businesses, said Mr Lim.
"More significantly, such initiatives will also provide a boost to the multilateral trading system," he said.
The Fullerton Lecture Series is organised by the International Institute for Strategic Studies and comprises eight talks a year on topics such as geo-economics, international law, foreign policy, security strategy and transnational challenges.
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