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PM Lee says anti-trade sentiments can hurt hundreds of millions, urges G-20 leaders to redistribute benefits of trade
[HAMBURG] Prime Minister Lee Hsien Loong has called on leaders of the world's 20 biggest economies to redistribute the benefits of trade more equally to arrest the anti-trade sentiments sweeping across many nations.
The risks are high if the mood spreads to more countries because it could hurt the livelihoods and prosperity of hundreds of millions of people, he said on Friday (July 7), the opening day of the Group of 20 (G-20) Leaders' Summit in Hamburg.
Mr Lee, who spoke during a working session at the summit, was making the case for countries to support the multi-lateral trade model such as the European Union and the Asean Economic Community established in 2015.
The trading system has come under siege in some countries, as workers and unions become anxious about jobs.
Mr Lee acknowledged that there are "pluses and minuses within each country, but these can and must be squared off by governments through domestic policies, adjustment packages and political understandings," he said.
Some countries deal with the anti-trade forces by adopting a bilateral approach to trade matters, he noted.
But many others, especially small countries such as Singapore and members of the Global Governance Group (3G), "strongly prefer the established multilateral route"."Small countries especially need to band together to make our collective voice heard, and achieve shared interests," he said.
Singapore was invited to attend the G-20 summit as convener of the 3G, an informal group of 30 small and medium-sized countries. The G-20 is a group with 19 countries and the European Union.
While international trade has been an engine of prosperity and growth for all countries, it has become clear in recent decades that its benefits are distributed unequally, Mr Lee said.
As a result, global trade is blamed for "painful domestic dislocations" although the evidence is far from conclusive.
With workers and unions growing more anxious about jobs,the established consensus that an open, rules-based multilateral trading system is a shared good of all countries is being questioned, he noted.
This development has political consequences, the Prime Minister said.
It led Britain to vote to quit the European Union last June and helped carry United States President Donald Trump into the White House five months later.
One of Mr Trump's first acts was to pull the US out of the multilateral Trans-Pacific Partnership trade deal, and pursue "America First" policies.
Mr Lee argued that multilateral arrangements give countries greater scope to make trade-offs between different sectors, and reach "win-win deals".
He said many major trading countries have reaffirmed they still support the multilateral model. This, he added, is a politically courageous move that is crucial to prevent "tit-for-tat responses setting off a downward spiral".
The best example of countries working multilaterally with one another is the European Union.
The World Trade Organisation (WTO), however, is the ideal platform for multilateral trade, but in practice, it has become difficult and time consuming to reach deals as it has 164 members, Mr Lee said.
Still, the WTO does valuable work, he added, citing the Trade Facilitation Agreement that came into force in February 2017.
The agreement is the first multilateral deal concluded in the WTO's 21-year-history, and a 2015 study by WTO economists has projected that its full implementation will reduce members' trade costs by an average of 14.3 per cent, with developing countries having the most to gain.
But these did not appear to convince protesters bent on disrupting the two-day summit hosted by Chancellor Angela Merkel.
Hundreds of them in various parts of the city tried to break through the security cordon around Hamburg Messe and Congress, the summit venue.
Besides PM Lee, leaders of six other non G-20 nations were also invited to the summit. They are from Spain, Norway, the Netherlands, Guinea, Vietnam and Senegal.
In December, trade ministers and senior officials from WTO member countries will attend the Ministerial Conference in Argentina.
Mr Lee hopes the conference will focus on issues where members can find consensus, and take "meaningful steps forward supporting the multilateral trading system, and the WTO"."For all its limitations, it is the ultimate forum for all trading nations to work together and build a global framework for trade," he said.
THE STRAITS TIMES