Singapore should turn to RCEP as TPP falters

By Chen Jiulin Source:Global Times Published: 2016/11/15 20:53:39

Illustration: Peter C. Espina/GT

Illustration: Peter C. Espina/GT



 

On Thursday at a labor organization meeting, Democrat Chuck Schumer, who is likely to be elected Senate minority leader, said the Trans-Pacific Partnership (TPP) trade deal wouldn't be approved by the US Congress. Now Singapore, which Barack Obama referred to as "an anchor for the US presence in Asia," is likely to face a difficult situation after Donald Trump takes office and Singapore's export-oriented economy is likely to be profoundly impacted.

The Singaporean economy has had a tough few years. Statistics from the Monetary Authority of Singapore, Singapore's central bank, show that in the third quarter of 2016, Singapore's GDP growth unexpectedly shrank an annualized 4.1 percent from the previous quarter, the country's biggest quarterly contraction in four years.

Against this backdrop, Singapore viewed Obama's "pivot to Asia" strategy and the TPP trade deal as its life-saver. But the President-elect Donald Trump opposes the TPP deal.

Being one of the four initiators of the TPP agreement, Singapore spared no effort in pushing forward negotiations after the US showed interest in the deal and has called on the US legislature to ratify the agreement. In October Singapore's Prime Minister Lee Hsien Loong expressed his opinion in an interview with Time magazine that the US "risks injuring its standing and credibility with countries across the world" if the TPP deal is not ratified. Following the presidential election, the Singapore Business Federation expressed the hope that Trump's administration would value the "longer-term benefits and the strategic value that the TPP could bring to the US."

Despite Singapore's efforts and Japan's lower house of parliament having approved the TPP, the trade deal is in fact crumbling. President-elect Trump wrote in USA Today in March that "the TPP is the biggest betrayal in a long line of betrayals where politicians have sold out US workers."

According to an article from US-based political publisher Politico, Donald Trump has plans to realize some of his most controversial campaign promises that are related to what he described as "job-killing" trade policies, including withdrawing from the TPP agreement. Against this backdrop, the failure of the TPP is almost inevitable.

In addition, there are further challenges Singapore faces. On November 6 at a campaign rally in Florida, Donald Trump criticized countries in Asia, including Singapore, for stealing job opportunities from the US, and pointed to the fact that "US firm Baxter Healthcare Corporation laid off 199 workers and moved their jobs to Singapore." It seems that in his view, the profits Singapore has gained from the country's free trade policies are at the cost of US job cuts. In this respect, Trump's diplomatic and trade policies toward Singapore might not benefit the Southeast Asian country when he succeeds Obama in the White House.

For a long time, Singapore has claimed to seek a balance between the major powers of the US and China, but in reality the country has been taking the US' side. As a Chinese proverb goes, "a great man always considers the timing before he acts." If Singapore continues clinging to the TPP, the country is expected to fall deeper in its economic slide. To avoid that situation, Singapore needs to attach more importance to the Regional Comprehensive Economic Partnership (RCEP) negotiations launched by leaders from the Association of Southeast Asian Nations (ASEAN) and its free trade agreement partners, China included, in 2012. Standards of the RCEP are expected to be more suitable to countries in East Asia and Southeast Asia. Together with China's strong support in the RCEP, Singapore is likely to be able to halt its economic downturn and revive its economy by strengthening free trade with countries within the East Asian and Southeast Asian region.

The author is former CEO of China Aviation Oil (Singapore) Corporation Ltd. bizopinion@globaltimes.com.cn



Posted in: INSIDER'S EYE

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