Leaders from Asia and Europe reiterated their commitment to strengthening the multilateral system at the Asia-Europe Meeting (Asem) summit in Brussels yesterday.
"Only the multilateral approach allows us to confront global challenges," said European Commission President Jean-Claude Juncker, as several other leaders in their speeches also underlined the need to support and update global institutions such as the United Nations and World Trade Organisation (WTO) that are under stress.
Prime Minister Lee Hsien Loong, who addressed a plenary session titled "Reinforcing the Multilateral System", outlined how economies are much more interconnected and interdependent today - and countries had to work together to make progress on global challenges.
"Even the biggest rely on a stable global system within which they can cooperate productively and compete peacefully, resolve disputes, and work together on new areas," he said. "If we weaken the multilateral framework, at the minimum we will reduce our standards of living, but beyond that we will exacerbate rivalries and conflicts and further risk destabilising the world order."
PM Lee was therefore glad that many Asian and European countries had stepped forward to reaffirm their commitment to multilateralism. "Countries have generally responded with restraint to trade disputes. Some are liberalising their economies and reforming outdated practices. Several are working on major regional free trade agreements," he said.
"As a small country, Singapore feels more acutely than most the need for a strong multilateral system. But such a system actually benefits all countries big and small," he added.
"If countries take a purely realpolitik approach, acting on the basis that might is right, they may gain in the short term, but they will forgo many more opportunities for win-win cooperation in the long term. This will ultimately not be sustainable."
PM Lee also noted how the open, inclusive system the United States upheld over the past 70 years had enabled many countries to prosper, including America.
As a result of this success, the global balance has changed. The European Union and China now each have a gross domestic product about equal to the US in purchasing power parity terms. Yet no economy can play the role the US initially did in the global system.
And the multilateral framework has come under severe stress, with countries acting on their own, and explicitly turning their back on multilateral approaches and bodies.
There is thus a need, PM Lee said, to update and strengthen WTO rules to deal with new issues such as technology transfer and e-commerce.
The trade framework must also reflect the changed balance - in both the influence and responsibilities countries have - in order to be seen as fair and politically sustainable.
Global financial governance is another area in need of strengthening, he said. He was glad that the European Commission and the European Central Bank had strongly supported recent recommendations by a G-20 eminent persons group, chaired by Deputy Prime Minister Tharman Shanmugaratnam, to reduce the incidence and severity of financial crises - among others - so countries need not fear opening up. "These proposals, when they are implemented, will significantly strengthen and stabilise the global financial system," he said.
Issues like climate change and nuclear proliferation can also be solved only multilaterally, he added.
European Council President Donald Tusk said Asem's members underlined their commitment to keep the platform's process open. "Leaders stressed that recent international developments have boosted the relevance of Asem as a building block for effective multilateralism and the rules-based international order anchored in international law and with the UN at its core," he said.
"They highlighted the vital need of maintaining an open world economy and upholding the rules-based multilateral trading system, with the WTO at its core," he added.
Mr Tusk said Asem leaders also stressed their commitment to comply with WTO rules, work to make its dispute settlement system more effective and redouble ongoing efforts at reforming the organisation.