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WhyItMatters

Restoring trust in free trade

Now that the Asia-Pacific Economic Cooperation Summit is over, it is time to take action on the numerous policy suggestions aimed at winning back trust in global free trade.

This year's Apec meeting took place amid growing pushback against globalisation, an issue the US presidential election this month and the Brexit referendum in June brought into sharp focus.

The Apec Summit, which ended on Sunday, was timely in gathering the leaders of 21 economies, including the world's top three, to address the growing problem.

One suggested approach is to target micro, small and medium-sized enterprises, which account for 97 per cent of all businesses and employ about half of the two billion workers in the Asia-Pacific.

The leaders made a commitment to pour resources into helping these businesses innovate and exploit technology to expand overseas.

The move will go some way in addressing concerns that globalisation benefits mainly large companies while leaving the man in the street worse off.

The Apec leaders also pledged to focus on helping workers develop skills for the digital economy.

But the success of any plan lies in its implementation. As Prime Minister Lee Hsien Loong said at the meeting, it is not only about informing people of globalisation's benefits, but also ensuring that "the reality reflects the rhetoric".

Since Apec's formation in 1989 to promote free trade, the per capita income of Asia-Pacific residents has risen 74 per cent.

But the free trade system has had a negative impact on a significant number of people too.

If Apec's economies can, in the next few years, tangibly improve the lives of those hurt by globalisation, it will go a long way in restoring confidence in free trade.

Otherwise, the continued promotion of economic integration will be seen by disaffected voters as a case of out-of-touch elites doubling down on failed policy and ignoring their collective, democratic will.

This will quicken the spread of anti-globalisation.

Chong Zi Liang

A version of this article appeared in the print edition of The Straits Times on November 24, 2016, with the headline 'Restoring trust in free trade'. Print Edition | Subscribe