The free trade deal Singapore and the European Union have just signed shows that both sides are open for business, and that they are committed to free trade, liberalisation and the principles of interdependence and cooperation, Prime Minister Lee Hsien Loong said.
"We hope that other countries will also maintain this line and will also uphold the multilateral system which we all benefit from," he added in an interview with Singapore reporters shortly after the signing ceremony at the end of the Asia-Europe Meeting (Asem) Summit last Friday.
Expressing a similar hope was European Commission (EC) president Jean-Claude Juncker, who said the signing "is a strong message by like-minded partners to defend and promote an international system based on rules, cooperation and multilateralism".
The summit involving 30 European and 21 Asian countries, the EU and the Asean secretariat took place amid ongoing trade tensions between the US and China, and days after US Commerce Secretary Wilbur Ross blamed the EU for unsatisfactory progress in ongoing trade talks.
Many Asem members, however, did not explicitly single out the United States for drifting towards unilateral action, even as they called for upholding multilateral cooperation to tackle pressing and emerging challenges.
Asked about their mood, PM Lee said he sensed the Europeans were anxious. "They also have a lot of business with China, at the same time America is crucial to them. It's not just a big economic partner, but a treaty ally for the Nato members. How do they manage both relationships and stay friends with both?" he said.
Key points of deal
• Singapore will drop tariffs on all products imported from the EU; the EU will remove tariffs on 84 per cent of Singapore products and the remaining 16 per cent over three to five years
• An investment-protection agreement will replace existing bilateral treaties and set up a new dispute-resolution mechanism for investors
• The deal is expected to be ratified by both sides, and enter into force, next year
HOW SINGAPORE WILL BENEFIT
• Tariff-free access for most exports to the EU, which is Singapore's third-largest trading partner and the world's largest single market
• Singapore companies will enjoy more access to EU's services sector, including tourism and telecommunication
• Singapore companies will be able to bid for more government procurement projects in the EU
• Lower costs for Singapore exporters in sectors like electronics, thanks to fewer duplicative testing and certification procedures
SOURCE: MINISTRY OF TRADE AND INDUSTRY SINGAPORE
"They don't really want to be forced to go one way or the other, just as we don't want to be forced to have to choose sides."
PM Lee added that just as EU leaders are working hard to deal with the trade issues with the US, they also had trade issues with China that are not negligible.
He cited how at the Asem retreat last Friday, China's Premier Li Keqiang had to excuse himself after he spoke as he was due to have a separate bilateral lunch with EC president Juncker on trade issues.
"These are tensions which have arisen in the multilateral system," PM Lee said, noting it was why he had raised the need to not just uphold multilateralism but also bring it up to date, which would include addressing new issues such as cyber security and e-commerce.
"You can't go back to where it was, because the old system was showing its strains and limitations. But if you abandon it and go one to one bilaterally, I arm wrestle you and you arm wrestle him and whoever is stronger bilaterally wins, in the end… everybody will lose, and not just economically," he added.
"That is a message that people will accept. Whether there will therefore be the give and take sufficient to reach a wearable and sustainable solution, there's a lot of work to be done still," he said.
Earlier in the day, PM Lee told fellow leaders that without agreed rules for cyberspace, countries that are attacked will respond in kind, and the world would risk degenerating into a state of open warfare unfettered by any rules.
Countries should therefore form enforceable rules and norms to restrain and verify errant behaviour, he said.