Singapore welcomes pause in US-China trade war, says DPM Teo

China and the US declared a truce on ongoing trade tensions on Dec 1, 2018, and agreed to hold off on new tariffs and give negotiators another three months to come to a consensus.
China and the US declared a truce on ongoing trade tensions on Dec 1, 2018, and agreed to hold off on new tariffs and give negotiators another three months to come to a consensus.PHOTO: AFP

PARIS - Singapore welcomes the pause in the trade war between the United States and China as the spat did not benefit anyone, Deputy Prime Minister Teo Chee Hean said in an interview with television news outlet France 24 on Wednesday (Dec 5).

Mr Teo, who is in France this week for an official visit, said the pause in the trade war "breaks the cycle of negativity that has been going on for far too long".

He added: "We hope that during this pause, both sides will take steps to resolve at least some of the more prominent issues, build some trust, and then we hope that that will allow further progress."

At the sidelines of the Group of 20 summit in Argentina last Saturday, China and the US declared a truce on ongoing trade tensions and agreed to hold off on new tariffs and give negotiators another three months to come to a consensus.

Mr Teo, who also met enterprise leaders, start-up founders and research institutes during his visit to France, said the trade war affects Singapore and many countries in three ways.

First, he noted, Singapore's exports may be affected by higher tariffs.

"That is not good for us - solar panels, electronic products."

 
 
 
 

Second, he added, the trade war leads to disruptions in the global supply chain, which Singapore is "very plugged into".

And third, he said, tensions between the two biggest economies in the world cause problems for countries around the world.

"On the trade front, if it depresses trade and investments overall, that is not good for any of us. If it spills over into other areas of competition, that broadens the issue considerably and I think, it will not be to anyone's advantage."

When asked how Singapore would choose if it were forced to take sides in this tension, Mr Teo noted that China is a major trading partner of Asean and accounts for about 17 per cent of its trade.

However, he added: "But I think the preference for all countries in the world, is to be able to have a constructive relationship, maintain that multilateral trading system and an open trade. That is much better for everyone, including the US and China."

Mr Teo also touched on local politics during the interview, saying that the Singapore model "is one that's based on consensus and trying to bring people together".

"I think all too much in the world today people talk about division when they talk about politics - contention, conflict, argument. But what we try to do in Singapore is to bring people together so that we can achieve stability and also achieve our national goals."

The interviewer also raised the issue of France's "yellow vest" movement - a protest movement which began on Nov 17 over planned hikes in diesel taxes, but has come to represent growing discontent over income inequality in the country - and asked whether such a movement could happen in Singapore.

Mr Teo replied that "we have to make sure that the benefits of globalisation are widely spread", adding that in Singapore, the Government talks to people, unions and workers to form a tripartite relationship.

"We now have a future economy committee and (Finance Minister) Mr Heng Swee Keat is chairing that. And we are looking sector by sector to see how we can help companies transform," he said.

"How can we help workers gain new skills and remain employable in each of these sectors and each of the types of jobs that we have in Singapore? That's critical. You have to do the actual groundwork."

Mr Teo added that people should see technology not as a challenge or something that takes away jobs.

"Skills training, lifelong learning is one of the major things that we are embarking on in Singapore right now to make sure that our people stay employable throughout their lives," he said.

"And that is also another way of making sure that the benefits of global trade and technology are widely spread."