PM Lee warns against pursuing protectionism

PM Lee's call for countries to promote trade was made at the Commonwealth Heads of Government Meeting on April 19.
PM Lee's call for countries to promote trade was made at the Commonwealth Heads of Government Meeting on April 19. PHOTO: AFP

He urges Commonwealth nations to promote trade and highlights risks of imposing curbs

Prime Minister Lee Hsien Loong has taken his message on the importance of free trade to the Commonwealth stage, as he highlighted the risk of countries pursuing protectionism in the guise of tackling their political and security concerns that come with the freeing up of investment flows.

Raising the red flag against trade conflict for the third time in a fortnight, Mr Lee warned that restricting investments unduly will do more than just damage the rules-based multilateral system of trade and investments. It will also cause strategic and great power rivalry. And such competition can be destabilising and dangerous to the world, he added.

Mr Lee's call for countries to promote trade was made at the Commonwealth Heads of Government Meeting on Thursday.

Trade promotion was a key theme at the biennial meeting attended by 53 leaders of Commonwealth nations.

The discussions are timely, he said, "as the political mood in many countries has become hostile to free trade, and specifically to the open and rules-based multilateral trading system".

His warning, which he had also raised at the China Boao Forum about a week ago and in The Washington Post on Wednesday, came in the wake of trade tariff announcements by the US and China. These have stoked fears of a trade war.

While the economic impact has been limited for now, Singapore, as a small, trade-dependent country, stands to lose in trade wars.

Also, the damaging of ties between the two superpowers could have catastrophic consequences for the world, Mr Lee had warned.

China's Foreign Affairs Ministry agreed with Mr Lee's view in The Washington Post. It said: "The international community should jointly uphold the multilateral trade system with free trade as a cornerstone, and work together to boost the continued recovery of the world economy and international trade."

In his address to the Commonwealth leaders, Mr Lee also reiterated that unilateral tariffs will lead to tit-for-tat action and undermine the multilateral trading system. Such a system is ideal as it sets uniform rules and balances the benefits and concerns of all countries, he said.

The US has taken steps to protect its domestic industries through tariffs on solar panels, steel and aluminium, and this has affected companies in Singapore.

Amid the antagonism towards free trade, Commonwealth nations should make the most of the network, which Mr Lee indicated has functioned as a trade bloc.

He urged them, among other things, to capitalise on their similarities like their economic outlook to promote trade among themselves.

British Prime Minister Theresa May, who spoke at the start of the meeting, is expected to use the occasion to pitch for greater trade in the Commonwealth as Britain prepares to exit the European Union.

She noted the leaders also discussed significant global challenges, like climate change and cyber security. Calling the Commonwealth a unique organisation, she said: "At this summit, we have an opportunity to deliver lasting change that benefits all our 2.4 billion people."

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A version of this article appeared in the print edition of The Straits Times on April 21, 2018, with the headline 'PM Lee warns against pursuing protectionism'. Print Edition | Subscribe