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G-20 SUMMIT

PM calls for sustained momentum to liberalise trade

Governments should help companies and workers take advantage of new technologies and seize opportunities
Tuesday, September 6, 2016 - 05:50
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PM Lee and Foreign Minister Vivian Balakrishnan with Canadian PM Justin Trudeau on the sidelines of the G-20 Summit in Hangzhou on Monday.

Hangzhou, China

COUNTRIES should help their businesses and citizens to compete and take advantage of global markets, said Prime Minister Lee Hsien Loong on Monday as he outlined ways for governments to promote trade in a sluggish economy.

Addressing world leaders during a plenary on trade and investment on the Group of 20 (G-20) Summit, Mr Lee said there should be efforts to help companies and workers take advantage of new technologies and seize opportunities at home and abroad.

It is important for governments to shift them out of uncompetitive industries and intervene to facilitate change and avoid structural unemployment in the workforce, rather than hand out subsidies to solve these issues.

Mr Lee also urged his counterparts to keep their regulations updated with new business models, rather than close themselves off from the rest of the world.

From a regional perspective, he spoke of the importance of having active participation in regional institutions and trade agreements, such as the Trans-Pacific Partnership or China's "One Belt, One Road" initiative, to help economies integrate further.

Europe is also dealing with integration issues, said Mr Lee. Many nations there are debating what the level of integration should be to balance closer political and economic objectives, even as they harbour concerns about immigration and sovereignty.

"We wish Europe well in working out the arrangements which will preserve as much as possible the benefits of the cooperation, and to maintain all the wisdom and experience that have been gained in the last 70 years since Europe started along this path and abandoned the path of conflict and war," he said.

Beyond regional cooperation, the prime minister said there should be sustained momentum around the world to facilitate and liberalise trade. To do this, the World Trade Organization's (WTO) Trade Facilitation Agreement needs to be ratified to boost trade and help goods to flow.

The WTO's Environmental Goods Agreement - a deal to cut tariffs on items such as wind turbines and solar water heaters - should be concluded by the end of this year as planned.

The world should also take steps to liberalise telecommunications and environmental services. When these goals are achieved, they will help boost growth and deliver prosperity for all, said Mr Lee.

Earlier during an interview with the Singapore media, Mr Lee commented on Singapore's active role in the G-20 process. Being invited to participate means the Republic is able to be seen and heard on major issues at the highest levels.

Singapore is not a member of the G-20 - the group comprises 19 major economies and the European Union - but had the chance to take part as one of eight guest nations invited by Chinese President Xi Jinping.

Mr Lee singled out taxes as one of the G-20 issues that Singapore had keen interest in, specifically the issue of base erosion and profit sharing (Beps). This refers to tax planning strategies that exploit gaps and mismatches in tax to artificially shift profits to low or no-tax locations where there is little or no economic activity.

"We have a concern because we want to make sure that it works out fairly and we don't get inadvertently disadvantaged by the new rules, and we've been participating actively in that," he said.

Mr Lee added that China had set the "right focus" for the talks this year, with the themes of innovative growth, structural changes, inclusiveness in growth and the digital economy.

"These are all areas where the countries are already focusing on, it's helpful we come together and talk about them. It focuses minds and enables us to work more closely together on these issues," he said.

"It's the right thing to talk about because it's not something abstruse or concerning only a minority of the big players, but something which big and small countries are all concerned with, and their populations too."

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