SINGAPORE - Amid technological and trade tensions between the United States and China, it is important to uphold a rules-based trading system and develop the global digital economy for the next lap of growth, said Trade and Industry Minister Chan Chun Sing.
This requires companies and policymakers to work closely together, he said at a webinar held by international magazine The Economist on Wednesday (Aug 12).
"We are all richer if we are able to share the data, use it, analyse it and produce new products and services. But we are all poorer if we set up digital firewalls, fragment the digital space and can't optimise at the global level," he added.
He encouraged digital giants such as Google and PayPal to play their part by persuading various governments to adopt an open position.
Elaborating, he said: "Data is not like oil, where if I consume it, I deprive you of consuming it.
"In fact, data has an increasing rate of return - where the more I use it together with you, the more value we create out of it. We need to have a new mindset of how we can work together as a global ecosystem."
Adding that technological bifurcation will lead to the fragmentation of technical standards, he said Singapore hopes to play the role of an integrator.
"We are able to allow systems from different parts of the world and different standards to work together, and provide a platform for people to come up with new products and services through the cross-pollination of ideas."
Responding to a question from the moderator, Mr Christopher Clague of The Economist Intelligence Unit, Mr Chan said the issue is not whether Singapore is confident that the World Trade Organisation (WTO) can persist as a rules-making and rules-enforcing institution, but that everyone must make the WTO work.
He further pointed out that countries need to reject beggar-thy-neighbour trade policies. "Without a set of rules, we are all the poorer for it. Can we imagine going back to a system where 'might is right'?
"It behooves us all to make sure that we have a set of rules that everyone can abide by, and that there is a fair mechanism for dispute settlement."
In December last year, US President Donald Trump refused to nominate new judges to the WTO's dispute resolution body. Without the required number of judges to hear cases and appeals, the WTO's ability to enforce its treaties has been crippled..
On US-China relations, ICBC Standard Bank managing director and chief China economist Jinny Yan said tit-for-tat actions can be expected to escalate in the months leading to the US presidential elections in November.
"The double whammy of demand and supply shocks are starting to have an impact on corporate investors," she said, adding that this is why firms and investors should diversify not just in terms of currency risk, but also into sectors such as renewables and healthcare, and environmental, social and corporate governance (ESG)-based investing.
She added: "The West will have to work with China in some form or shape and there is no way around that."
In this regard, major free trade agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) help provide a measure of predictability and stability in the global trading regime, said Mr Kimura Fukunari, chief economist of the Economic Research Institute for Asean and East Asia.
Such FTAs can promote further liberalisation of trade and investment, amid the "uncomfortable" talk of US-China decoupling, he added.
"Countries in East Asia have a close relationship with the US and China and do not want to have to choose between them.
"In the short run, (Asean countries such as) Vietnam can benefit from trade diversion. But in the long run, the rules-based trading regime is weakened," Mr Fukunari said.
APEC Secretariat executive director Rebecca Fatima Sta Maria expressed confidence that Asia will propel the world's economic recovery.
She urged analysts to focus on the efforts led by 'middle countries' such as New Zealand, Singapore and Chile. "The movement on freeing up markets, ensuring the flow of goods, and the digital economy are not coming from the two big powers, but from these countries."
While the coronavirus pandemic may have changed business models and work patterns, what matters is that the digital economy remains inclusive, said Dr Sta Maria.
Calling for a set of global digital standards, she added: "We need to look at data flows, privacy rules, data infrastructure - and also the fact that the digital economy can be less than inclusive if not managed.
"As we go towards this new phase of trade and investment, governments and businesses should build resilience and ensure that no one is left behind."