SINGAPORE – At a time when the global order faces growing stress from fraught geopolitical relationships, pushback against economic integration and the ongoing Russia-Ukraine war, Foreign Minister Vivian Balakrishnan has called on Asia and Europe to work together for mutual benefit.
The formula for globalisation and economic integration, which has worked well over the past 60 years to generate growth and lift many out of poverty, is now at risk, he said.
Speaking on the 25th anniversary of the Asia-Europe Foundation (Asef) at its premises in Pasir Panjang, Dr Balakrishnan on Wednesday commended the good work that the foundation has done to promote mutual understanding through intellectual, cultural and people-to-people exchanges.
Asef, which started in 1997, is an intergovernmental non-profit organisation with multiple roles, including acting as the civil society outreach of the Asia-Europe Meeting (Asem) – an intergovernmental forum established in 1996 to address political, economic and socio-cultural issues and create opportunities for collaboration among its 53 partners.
Dr Balakrishnan acknowledged that it is not a given that countries will come together willingly to work alongside one another.
“These things don’t happen spontaneously. It requires effort, commitment and communication. Most of all, it requires the building of mutual trust and understanding,” he said.
“This is why the work of Asef, which complements the Asem process and translates its agenda into something tangible, is not just important, but in fact, indispensable.
Therefore, he said, it is necessary that Asia and Europe double down and engage with each other more closely, particularly on trade.
Calling Europe and Asia natural partners and instinctive multilateralists, he said both blocs should build on agreements such as the EU-Singapore Free Trade Agreement (EUSFTA) and the Asean-EU Comprehensive Air Transport Agreement.
On the Asean-EU FTA, he called for an “expeditious conclusion” of the agreement. Negotiations kicked off in 2007, but after discussions were suspended in 2009, the EU went on to pursue bilateral trade agreements with the individual Asean member states instead.
The EU remains concerned about several Asean members, including Cambodia and Myanmar, which have been sanctioned for their human rights violations.
Making a case for the Asean-EU FTA, Dr Balakrishnan said that by working together, both blocs can harness opportunities in areas of mutual interest such as digital and green economies.
“We must also take full advantage of the digital revolution. We need to intensify our efforts to deal with climate change, a clear and present threat, one whose effects could be amplified significantly over the next two decades,” he added.
Dr Balakrishnan painted a grim outlook should countries choose to forgo economic integration and close themselves off from others.
He highlighted how the semiconductor industry has enjoyed a boom since the 1960s. The production cost of semiconductors has come down significantly because of improvements to the manufacturing and supply chain, innovation and efficiency.
The industry’s gains are now at risk because of the division in the global economy, he said.
“This will have an immediate impact on higher inflation, a slower rate of progress, and it will also cause a more disruptive, volatile world.
“Because that sense of interdependence, that we are all in this together, will also be lost. That is why we are in truly unprecedented and dangerous waters.”
Avoiding an arms race or a technological war is also imperative, he said. These events would hinder countries from investing in infrastructure and connectivity, healthcare, education and training for its citizens.
These are priorities that would benefit and have a tangible impact on people’s lives and livelihoods, said Dr Balakrishnan.
“If we are to meet the demands of our citizens all over the world, we actually do need a rules-based world order, and greater – not less – economic integration.”
