China and Japan can take over the leadership role of the United States in moving free trade forward in Asia, Emeritus Senior Minister Goh Chok Tong said yesterday.
But to go beyond the region, with the aim of eventually achieving globalised free trade, countries could try to get the US on board again by promoting “free and fair” trade, he suggested.
Mr Goh’s comments at an annual forum held in southern China come amid rising anti-free trade sentiments in the West, which saw the US pulling out of the Trans-Pacific Partnership (TPP).
The mega trade pact, originally initiated by the US, involved 12 countries including Singapore and Japan but not China.
“The US was paramount in getting the TPP going… (it) was the leader in keeping trade open and free,” said Mr Goh at a Boao Forum for Asia (BFA) panel discussion on globalisation and free trade.
Now that the new administration under President Donald Trump has “taken a step back”, China and Japan can come to the fore to “step into the shoes of the US”, Mr Goh told a gathering of political and business leaders at the four-day event.
This could be done through the Regional Comprehensive Economic Partnership, a trade pact that is being negotiated among the 10 Asean nations and China, India, Japan, South Korea, Australia and New Zealand.
“That will keep the momentum for free trade going, at least for the Asian side,” he said.
Another panellist, US Trade Representative Michael Froman, observed that in spite of protectionist sentiments in the US and some parts of Europe, “globalisation continues to march forward” in much of the world through various regional trade pacts.
He called on countries like China, which have benefited from globalisation, to continue with reforms to further open up their economies for trade and investments.
“The onus is on them to ensure that it’s working fairly,” said Mr Froman, referring to the current system of free and open trade.
Mr Trump has accused China and Japan of unfair trade practices.
China’s central bank chief Zhou Xiaochuan said globalisation is already a reality that is before everyone.
“It’s not something that you could choose to welcome or not. It’s a challenge... that you cannot avoid,” he said.
He added that the practice of using government policies to create or protect jobs in specific sectors such as manufacturing is “very much questionable” as an efficient way of reallocating resources, because it could end up being indirectly discriminatory towards other sectors.
He also warned that the US’ threat to slap higher tariffs on imports could have the unintended effect of making its exports more expensive, rather than more competitive.
The China-led BFA, which is now in its 16th year, has been touted as Asia’s version of the World Econo- mic Forum that is held in Switzerland.
Mr Goh, who is on the BFA’s board of directors, also met former Chinese vice-premier Zeng Peiyan, outgoing Hong Kong chief executive Leung Chun Ying and Guangzhou party chief Ren Xuefeng on the sidelines of the forum yesterday.