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The world needs integration, inclusive growth, and to seize the digital economy: Chan
THE global economy faces a fundamental choice between integration or fragmentation, said Minister for Trade and Industry Chan Chun Sing on Wednesday. But, he added, whether nations can continue to pursue the growth trajectory offered by globalisation, depends on their respective abilities to bring inclusive growth to their populations, by helping businesses and workers adjust to the forces of change.
"Trade has become the favourite whipping boy," he said, "because trade necessitates domestic adjustments". "Not every country has been able to muster its resources to help its workers adapt, and help its businesses adjust their operating models. And because of that, many countries are facing domestic backlash against trade and globalisation."
Mr Chan was exchanging views with Australia's trade minister, Simon Birmingham, at a live-streamed fireside chat held at the Milken Institute's Global Conference 2020. The US-based think tank is holding its annual conference virtually this year, and expects participants from over 70 countries.
Asked to comment on US-China bilateral relations, Mr Chan urged both major powers to recognise a shared responsibility to uphold and update the global trading system. "Our prosperity - their prosperity - all depends on this," he said. "And if they sit down and think about it, they will understand and appreciate that they have more in common than differences."
Victory was not about one side winning or losing, he added, but about establishing a standard of leadership that would inspire the rest of the world to join hands with the concerned parties.
Mr Chan also emphasised the need for the rest of the world, including South-east Asia and the larger Asian region, to play its part. "It is incumbent on us to work together and play our part; not to be held ransom by the dynamics of just the two major powers," he said.
Besides global integration, Mr Chan identified the treatment of technological progress as a key driving force on which the trajectory of the global economy could depend. He added that the government would look "very closely" at data localisation and data protectionism, to seize opportunities brought about by the digital world.
"Many countries are only focused on conventional trade," he said. "But one large chunk of new opportunities in the future has to do with the digital economy. We need new rules to be established, so that the digital ecosystem can serve as the glue to help integrate the global economy, and propel growth to the next level."
Singapore has been a strong proponent of digital economy agreements, to establish international rules and frameworks that support businesses engaging in digital trade and e-commerce. Such agreements aim to enable seamless digital trade, and secure cross-border data flows. To date, Singapore has signed such agreements with Chile, New Zealand and most recently Australia in August. It is in similar negotiations with South Korea. (see amendment note)
Singapore has also worked with Australia and Japan as co-conveners of the World Trade Organization's (WTO) joint statement initiative on e-commerce. The initiative seeks to establish international rules and align regulations, to support global e-commerce.
At Wednesday's session, Mr Birmingham struck a cautious note on the prospects of the WTO. The Australia trade minister noted the next few years would be crucial for an institution that had become more disparate over time, with diverse economic systems. At the same time, he affirmed Australia's commitment to work with Singapore to drive e-commerce negotiations, which he described as "central to showing the modern relevance of the WTO".
Amendment note: An earlier version of this article incorrectly stated that a digital economy agreement was signed between Singapore and Australia in June, when in fact it was signed in August.