Singapore says it will continue to participate in other free trade initiatives, as members of the Trans-Pacific Partnership (TPP) consider new options after new US President Donald Trump ditched the trade pact that he said kills American jobs.
The Ministry of Trade and Industry (MTI) told The Straits Times yesterday that the Republic will also have to "discuss the way forward" with TPP partners.
"Each of the partners will have to carefully study the new balance of benefits," MTI said in a statement.
Countries from Singapore to Mexico are now considering their next move, after Mr Trump on Monday signed an executive order to withdraw the US from the 12-nation TPP that together accounts for 40 per cent of world trade. He also vowed to renegotiate a free trade agreement with Canada and Mexico.
Australia and New Zealand yesterday said they still hope to salvage the TPP despite the US withdrawal.
But the deal cannot go into effect in its current form without US participation, MTI said.
"Singapore is committed to pursuing a rules-based trading system and greater regional integration," it added. "The agreement that the TPP parties has negotiated is one such pathway to achieve stronger trade linkages that will promote growth opportunities and job creation in all the member countries."
The MTI spokesman said Singapore will continue to participate in regional initiatives such as the Regional Comprehensive Economic Partnership (RCEP) and the proposal for a Free Trade Area of the Asia-Pacific.
RCEP is an Asia-Pacific trade liberalisation initiative led by China that includes the 10 Asean members as well as Australia, New Zealand, Japan, South Korea and India.
Meanwhile, the Singapore Business Federation (SBF) called on the Government to join and encourage other TPP member countries to push for the implementation of the TPP, with or without the US.
"Without the US, the TPP continues to provide substantial benefits for businesses as the US market is already quite open," noted SBF chief executive Ho Meng Kit.
Singapore already has a bilateral free trade pact with the US, as well as with all of the other TPP countries except Canada and Mexico.
This means the about-turn by the US "might not have much detrimental impact on Singapore", noted DBS economist Irvin Seah.
The Trump administration's shift towards greater protectionism could hurt more, he said, adding: "This will deal a big blow to global trade liberalisation. It is negative for Singapore because we are a small, open, trade-dependent economy."
Other TPP partners have also expressed their keenness to make the deal work. Australia's Trade Minister Steve Ciobo, for one, told ABC Radio yesterday that a TPP without the US was "very much a live option".
Japan, another TPP member, has been pressing other signatories to push on with the pact too, while suggesting it will try to change Mr Trump's mind before next year, the deadline for the deal's ratification.
Prime Minister Shinzo Abe's top adviser Yoshihide Suga told CNBC: "We believe we still have an opportunity to convince the US about the importance of free trade."
But Professor Kamel Mellahi of Warwick Business School said: "The survival of the TPP trade deal is inconceivable. Plus, many Asian countries have an alternative in China's proposals."
•Additional reporting by Grace Leong