Singapore will continue to participate in other free trade initiatives even as the major trade pact known as the Trans-Pacific Partnership (TPP) hits a snag with the US' withdrawal.
The Ministry of Trade and Industry (MTI) told The Straits Times yesterday Singapore will have to "discuss the way forward" with the other TPP partners, after US President Donald Trump on Monday ended his country's participation in the TPP.
"Each of the partners will have to carefully study the new balance of benefits," the MTI said in a statement.
The TPP was originally signed by 12 countries, which together account for 40 per cent of world trade.
Australia and New Zealand said they hope to salvage the TPP despite the US withdrawal. But the deal cannot come into effect in its current form without US participation, the MTI said.
"Singapore is committed to pursuing a rules-based trading system and greater regional integration," it added.
"The agreement the TPP parties negotiated is one such pathway to achieve stronger trade linkages that will promote growth opportunities and job creation in all the member countries."
The MTI spokesman said Singapore will continue to participate in regional initiatives, such as the Regional Comprehensive Economic Partnership (RCEP) and the proposal for a Free Trade Area of the Asia-Pacific.
The RCEP is an Asia-Pacific trade liberalisation initiative led by China that includes the 10 ASEAN members as well as Australia, New Zealand, Japan, South Korea and India.
The Singapore Business Federation (SBF), meanwhile, called on the Government to join and encourage other TPP member countries to push for the implementation of the TPP.
"Without the US, the TPP continues to provide substantial benefits for businesses as the US market is already quite open," noted SBF chief executive, Mr Ho Meng Kit.
Singapore already has a bilateral free-trade pact with the US, as well as with all of the other TPP countries except Canada and Mexico. This means the about-turn by the US "might not have much detrimental impact on Singapore", said DBS economist Irvin Seah.
The Trump administration's shift towards greater protectionism could hurt more, he said, adding: "This will deal a big blow to global trade liberalisation. It is negative for Singapore because we are a small, open and trade-dependent economy."
Other TPP partners also expressed their keenness to make the deal work.
But Professor Kamel Mellahi from Warwick Business School said: "The survival of TPP is inconceivable. Plus, many Asian countries have an alternative in China's proposals."
- ADDITIONAL REPORTING BY GRACE LEONG
This article was first published on Jan 25, 2017.
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