For global cities, the global trading system works best

On a per capita basis, Singapore is the third-richest country in the world, with Singaporeans earning an average of US$61,000 (S$81,500) a year. -- PHOTO: BT FILE 
On a per capita basis, Singapore is the third-richest country in the world, with Singaporeans earning an average of US$61,000 (S$81,500) a year. -- PHOTO: BT FILE 

SINGAPORE has been one of the great economic success stories of the last 50 years.

It is a country with few natural resources, limited land, and a relatively small population. And yet, on a per capita basis, Singapore is the third-richest country in the world, with Singaporeans earning an average of US$61,000 (S$81,500) a year.

Over the years, many people have wondered how this incredible success has been achieved.

There are many reasons.

This is a dynamic, well-run country with strong government and a highly educated workforce. But in examining the reasons for Singapore's astounding success, trade must surely be at the top of the list.

Last month, the World Trade Organisation released the 2014 trade statistics and, once again, Singapore rates as one of the top traders in the world - the 14th largest exporter and 15th largest importer - a remarkable achievement for a country with only 5.4 million inhabitants.

Singaporeans take trade seriously. Goods and services cross Singapore's borders easily, thanks to efficient Customs and transport networks, and the fact that duties on imports are among the lowest in the world. The ultra-efficient Singapore port ranks as the second-largest container port in the world.

As Singapore celebrates the 50th anniversary of its independence, and the World Trade Organisation marks its 20th birthday, it is worth reflecting on the contribution of trade to growth and development in Singapore and in many other countries across the world.

In the early years of independence, Singapore's economy was based on exports of textiles, footwear and consumer electronics.

Today, Singapore is a global leader in media, design, finance and logistics, and is a fulcrum in the global supply chain. Entrepreneurs access the best-quality inputs at competitive prices, making Singaporean finished products highly competitive on global markets.

To build its trade, Singapore participates in a multitude of trade arrangements designed to open markets and provide clear, predictable trade rules.

The WTO underpins this rules-based, commercial architecture and, in this way, WTO membership has brought undoubted benefit to Singapore's producers and consumers.

The 2013 Trade Facilitation Agreement, for instance, makes moving goods across borders significantly easier and cheaper. Singapore's support was vital in pushing this agreement to conclusion and it was one of the first WTO members to fully ratify the agreement.

We hope others will follow in Singapore's footsteps so that the agreement can enter into force before our next Ministerial Conference in Nairobi in December - the first time such a meeting will be held in Africa.

Of course, regional partnerships are also important for Singapore, which is a member of Asean, and has negotiated nearly 20 regional or bilateral deals either on its own or with Asean.

In Singapore, as elsewhere across the Pacific, much attention is focused on the Trans-Pacific Partnership negotiations as well as other initiatives such as the Regional Comprehensive Economic Partnership in Asia.

These negotiations will lead to agreements that will profoundly impact the way companies trade and invest.

Some have suggested that the proliferation of regional agreements may, in some way, constitute a threat to the WTO and the multilateral trading system.

I disagree. Trade liberalisation is contagious, and when countries agree to open markets in a regional setting, they are more inclined to do so globally as well.

Regional initiatives like the Asia-Pacific Economic Cooperation (Apec) forum have also been laboratories producing important initiatives - including in areas where WTO work is now taking place, like trade facilitation and efforts to scale back barriers to trade in environmental goods.

The WTO's own Doha Development Agenda negotiations underpin much of this work and while this generates fewer headlines than was perhaps the case previously, this year is shaping up to be a critical juncture for the Doha Round.

Many ministers have expressed the desire to use the Nairobi ministerial meeting as the occasion to strike a deal that would pave the way for concluding the broader Doha Development Agenda.

Such an outcome would be a vitally important boost for global growth and would strike a blow against the ever-present threat of increasing protectionism.

For this to happen, however, WTO members need to set the stage by agreeing in July on a framework accord that would serve as a road map for success in Nairobi.

Since the beginning of the year, members have, for the first time in many years, been engaging in serious negotiations to liberalise trade in agriculture, manufactured goods and services.

New proposals have come to the fore and there is a renewed commitment to finding solutions. But big differences remain and we have much to do if we are to have success in July, and then in Nairobi. The support of pragmatic, sensible-minded players like Singapore will be vital.

Reaching a deal will not be easy but it is doable.

A strengthened global trading system offering more opportunities for growth and development would represent a significant bulwark against the rising tide of uncertainty buffeting the global economy today. An agreement is within reach.

stopinion@sph.com.sg

The writer is the Director-General of the World Trade Organisation. He is in Singapore for workshops organised by the Centre for Multilateralism Studies at the S. Rajaratnam School of International Studies and the WTO.