The history of the global trading system since the World Trade Organisation (WTO) was established in 1995 makes for a dismal narrative. Hardly any progress has been made in laying the foundations for a solid global trade architecture for the 21st century, let alone building an edifice.
Trade is very much at the core of globalisation. If the trade system disintegrates, globalisation will, too, and we may find ourselves back in a scenario of global divisiveness and conflict.
Singapore, as a nation whose spectacular growth story came from trade and whose welfare depends on trade, will suffer considerably from the consequences of renewed protectionism. Indeed, Singapore should assume a leadership role in the setting of the global trade agenda and building of the global trade framework.
The latest chapter in the dismal narrative was written in Maui, Hawaii, last month. Did the TPP (Trans-Pacific Partnership) effectively die there? The same question has been asked for the last decade about the WTO Doha Development Round: Is it dead? Perhaps the answer can be found from General Douglas MacArthur's farewell address to the US Congress: "Old soldiers never die, they just fade away." The same may be true of trade treaties: They never die, they just fade away into irrelevance and impotence.
TPP'S ODD BEDFELLOWS
Let me say that from the outset I was opposed to the TPP.
The composition of the membership seemed odd, defying logic. The 12 members - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam - are a diverse and disparate group geographically, economically, politically, culturally, etc. There was also a huge anomaly as it was dominated by two giants of the world economy - Japan and the US. Indeed, as negotiators from other countries complained, the "mega-regional" in reality boiled down to a Tokyo-Washington bilateral pact.
Furthermore, while, of course, all trade deals have a geopolitical dimension, the TPP appeared more like a geopolitically-driven policy with a trade dimension. The exclusion of China was seen as a weapon in the US' "pivot to Asia" policy armoury, underlined by the comment made in a speech by US Secretary of Defence Ash Carter: "TPP is as important to me as another aircraft carrier."
The failure of the ministers to conclude TPP negotiations in Maui confirms the view that it is a non-viable proposition. A similar fate awaits the TPP's mega-regional sister, TTIP (Trans-Atlantic Trade and Investment Partnership). As nothing seems to be working, further disintegration of the global trade system will occur.
What I fear is that these failures illustrate what is becoming increasingly alarming - the failure of globalisation. In a speech shortly after the creation of the WTO, its director-general, the late Renato Ruggiero, said: "We lived in a divided world (during the Cold War decades); now we live in an integrated world. And an integrated world is far more difficult to manage."
In the Cold War-divided days when Gatt (General Agreement on Tariffs and Trade), the WTO's precursor, was the international trade institution, it was run by what was called "the Quad", comprising the US, the European Union, Canada and Japan. They were fundamentally on the same wavelength, and geopolitical allies under the predominance of the US.
This was also a time when 85 per cent of world trade occurred between the OECD (Organisation for Economic Cooperation and Development) countries. Apart from the emergence of the "Four Little Dragons" (Hong Kong, Singapore, South Korea and Taiwan), there were no outside players. So what the Quad decided, the rest of the membership complied with.
How dramatically things have changed. The failure of the global trade agenda essentially reflects an incapacity of both the established and emerging players to adjust to the new global economic realities and to fashion a reformed global trade governance structure.
The future of the global trading system, like the future of the world economy generally, will be determined by developments in emerging Asia - China, East Asia and South Asia. The established players, the EU, US, Canada and Japan, obviously still matter in trade volume and policy, but they are not undergoing the deep and extremely rapid socio-economic transformations that this region is experiencing.
With the exception of a few wealthy nations, notably Singapore, most of Asia is still at a middle-income level, with great expectations of its coming generations for future growth and prosperity. This depends greatly on the future of trade.
Singapore has not only accumulated great advantage from global trade but also great acumen and experience, including a very high level of policymaking professionalism, as both an Asian regional and global hub, with a great deal of knowledge stored in its universities, research institutes and think-tanks. With these attributes, and as one of the original Asian NIEs (newly industrialised economies), Singapore clearly has an important role to play.
Rather than joining other misguided initiatives such as TPP, Singapore should lead in seeking to restore the centre of the global trade agenda to the multilateral sphere: the WTO. This would not be a question of reviving the Doha Round - it is dead - but fashioning a revitalised and reformed structure, one that would be inclusive, equitable, sustainable and dynamic. Singapore should set up as the hub of the global trade-policy debate for the 21st century.
• The writer is emeritus professor of international political economy at IMD, Lausanne, Switzerland, founder of The Evian Group and visiting professor at Hong Kong University and NIIT University in India.