PM Lee Hsien Loong urges US to sustain economic ties with Asia, uphold free trade

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PM Lee's speech at the Economic Club of Washington DC. VIDEO: PMO
PM Lee Hsien Loong noted that a new US administration with a radically different approach has not turned the substance of US-Asia ties upside down. He was interviewed by moderator David Rubenstein, president of the Economic Club of Washington, after the speech. ST PHOTO: SEAH KWANG PENG

WASHINGTON - The United States has to sustain its economic engagement of Asia, Prime Minister Lee Hsien Loong said on Monday (Oct 23), as he outlined how the region continues to hold many opportunities for US businesses.

At the same time, the peace and stability of the Asia-Pacific, which decades of such engagement helped shape, is also a vital US national security interest.

PM Lee was speaking to American business leaders at the Economic Club of Washington DC, where he noted that a new administration with a radically different approach has not turned the substance of US relations with Asia upside down.

On the economic front, the US trades more with Asia-Pacific than with Europe, while US multinationals have major investments in Asia-Pacific.

There are investment and technological gaps American companies can fill, growing middle classes to purchase US products, and great scope for US businesses to grow new markets, make fresh investments, and create prosperity on both sides of the Pacific.

On the strategic front, the US has major allies in Asia and US-China ties remain the most important bilateral relationship in the world. And successive US administrations have built up ties with the region and sought to ensure its stability.

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Prime Minister Lee Hsien Loong met US President Donald Trump in Washington DC, where they witnessed the signing of a S$19 billion Boeing deal and pledged to support the global coalition to battle the Islamic State in Iraq and Syria until 2018.

There have been concerns among many countries around the world - including American business leaders - that America's recent inward turn and distancing itself from multilateralism has weakened prospects for growth and for stability.

PM Lee acknowledged that while this may not be the time to start major new trade initiatives - President Donald Trump withdrew the US from the Trans-Pacific Partnership (TPP) earlier this year - the US should still uphold free trade and tackle issues that arise cooperatively with its partners.

America's attitude on these issues is key, PM Lee added.

"Do you still believe that you have the most to gain from an interdependent world, open exchanges and multilateral rules? How will your relations with China develop?" he said.

"How America answers these questions will determine not just prosperity, but war and peace - not just in Asia, but the world."

Asia remains one of the most dynamic regions, with its economies among the most vibrant and fastest growing - accounting for two-thirds of global growth today, PM Lee said.

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Chinese companies like Alibaba and Huawei, or Indian companies like Bharti Enterprises and the Mahindra Group, are world class MNCs.

The region as a whole is also becoming more integrated and interdependent.

Asean has formed an economic community that will be the fourth largest single market by 2030.

And it is pushing ahead on the Regional Comprehensive Economic Partnership, a free trade pact that brings together the grouping and six key trading partners - including China and India.

"It is a way to bring countries together and increase the incentive to work together rather than to collide with one another," he said.

Meanwhile, India has been making progress opening up.

And China, the single most important driver of Asia's prosperity and integration, has been enhancing its interlinkages with the region.

"Asian countries want to benefit from the trade and economic opportunities China offers", PM Lee said.

This is why they welcome Beijing's initiatives such as the Asian Infrastructure Investment Bank and Belt and Road Initiative.

From a strategic point of view, these are a constructive, stabilising way to accommodate China's growing influence into the international system, he added.

At the same time, Asian countries want an open, inclusive regional architecture, not a world divided into rival blocs, he added.

Having prospered under a global, multilateral system of trade and finance, they have substantial economic links with Europe and the US - and want to maintain and grow these even as they deepen cooperation within Asia, he said.

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