As small and open economies, Singapore and New Zealand will be significantly impacted by the ongoing trade war between the United States and China.
But their efforts to promote greater economic collaboration demonstrate the benefits of free and open trading relationships as well as a rules-based international order, and hopefully encourage other nations to seek out similar arrangements.
These were the sentiments shared by Prime Minister Lee Hsien Loong and New Zealand Prime Minister Jacinda Ardern yesterday at a news conference during Ms Ardern's first official visit to Singapore.
The leaders had signed a joint declaration to establish the Singapore-New Zealand Enhanced Partnership, which will step up collaboration in four areas, including trade and economics.
An upgraded bilateral free trade agreement was also inked to facilitate greater trade flows.
When asked how the enhanced partnership could mitigate slowing economic growth, PM Lee said he hopes it will help grow bilateral trade. Singapore and New Zealand's trade last year was $4.1 billion, a 12.1 per cent increase from 2017.
PM Lee acknowledged that both nations are small and the portion of bilateral trade relative to overall international trade is "quite small". The contribution will be very useful, but "modest".
"More important than the quantitative contribution will be that the enhanced partnership shows that we are cooperating and we are promoting economic integration and trade at a time when these basic concepts are being questioned and, in fact, under threat," he said.
He hopes this will encourage other countries to follow suit. "This is one step in the right direction," he said.
Agreeing, Ms Ardern said that for Singapore and New Zealand, as countries impacted by global trade tensions, it is "now more important than ever that we continue to model and demonstrate the benefits of free and open trading relationships" and a rules-based order.
"And I hope that by continuing to modernise our free trade agreements... we can demonstrate that we can keep pace, that we can make sure our businesses benefit from countries that have been agile and making sure that their free trade agreements are mirroring the changing environment they are working in," she noted.
The upgraded agreement builds upon the original one which took effect in 2001. It reduces barriers to trade, such as making it easier for companies to qualify for duty-free treatment in sectors such as electronics and processed food.
Among other things, it also addresses modern trade issues such as e-commerce. Firms will be able to access data freely and will not be required to locate computing facilities in a market as a prerequisite to doing business there.