Apec divided over trade, fails to issue joint statement
This is a first for the grouping and highlights US-China divide
Leaders of the Asia-Pacific Economic Cooperation (Apec) forum yesterday failed to issue a joint communique for the first time in the grouping's history, reflecting the deep division on trade.
A chairman's statement will be released in lieu of a formal written declaration by leaders of the 21-member regional grouping, which was formed in 1989 to promote free trade across the region.
The development came as Prime Minister Lee Hsien Loong said China and the US have to realise they must accommodate each other for an ongoing trade war between both powers to be resolved.
He made these remarks in response to a question about the trade war during an interview with Singapore media yesterday to wrap up his visit to Papua New Guinea for the Apec summit.
What happens next will depend on the meeting between Chinese President Xi Jinping and US President Donald Trump at the G-20 Summit in Buenos Aires in Argentina later this month and whether talks can be set on the right way, he noted.
"We all have to hope it goes in a constructive direction. Because otherwise, the loss to the parties, to America and China, as well as to other countries like Singapore and everybody else in the region and in the world will be considerable," he said.
Mr Lee's comments came as trade tensions between China and the US dominated the annual summit in Papua New Guinea over the weekend, with Mr Xi and US Vice-President Mike Pence trading barbs in back-to-back speeches on Saturday. Mr Pence had stated that the US will not lift tariffs until "China changes its ways".
At a closing news conference yesterday, Papua New Guinea Prime Minister Peter O'Neill said Apec leaders could not agree on whether mention of the World Trade Organisation and its possible reform should be in the Leaders' Declaration.
On the China-US trade war - which he called a complicated and difficult issue - Mr Lee told Singapore media that it becomes difficult to solve if viewed as "a manifestation of a fundamental contradiction between two countries".
But if the conflict is treated as one involving specific, practical trade issues which need to be overcome, then it is possible for both sides to deal with the specific issues at hand, he said.
"Presume good faith and good intentions on the other party, and work out practical solutions to those problems," he added, calling it a "chicken-and-egg problem" that requires a level of trust for both sides to start to resolve.
Mr Lee noted that US Commerce Secretary Wilbur Ross was reported in The Straits Times as saying that Mr Xi and Mr Trump are likely at best to agree to a "framework" for further talks to resolve trade tensions when they meet in Argentina.
But just like the Trump-Kim summit held in Singapore in June, the meeting on the sidelines of the G-20 can set talks in a constructive direction, he said.
International Monetary Fund chief Christine Lagarde told Apec leaders yesterday that a trade conflict could reduce world gross domestic product (GDP) by some 0.8 per cent.
Mr Lee said the amount is derived from the direct impact of tariffs, as well as the implications on investment and on market confidence, among other things.
But ultimately, the consequences of the trade war extend beyond trade, he noted.
"If you go down this path, the consequences are not just trade, but really the overall relationship and the difference between a world where the major powers are accommodating one another, and a world where the major powers are at odds with one another. It's not quantifiable in GDP terms."
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Region's leaders urged to do more to shape digital economy rules
Prime Minister Lee Hsien Loong yesterday called on leaders of Asia-Pacific economies to do much more to shape rules for emerging areas in the digital economy, such as electronic payments and digital identity.
He made the point that virtually every type of cross-border transaction now has a digital component, such as data management, cyber security or Internet connectivity.
Speaking at the leaders' retreat of the Asia-Pacific Economic Cooperation (Apec) summit in Papua New Guinea, Mr Lee said companies such as Alibaba and Amazon Digital are turning millions of small enterprises around the world into micro-multinationals, exponentially raising the number of participants in the digital economy.
Current trade rules have to be updated to address the increasing digitalisation of trade and accommodate more sophisticated transactions and consumers, he added.
For instance, new mechanisms to deal with cross-border flows of data are needed, Mr Lee said.
At the same time, the mechanisms must allow for regulation to keep data secure and protect privacy. Apec can do much more to advocate standards, he added.
"These progressive digital trade rules will support SMEs' digitalisation efforts, and also facilitate investments by the big players, global digital companies," he said, urging leaders to press on with initiatives to support businesses in adopting digital technologies.
You have to work out access rules – so they may set up an app in Singapore, the app can operate in a different countryPrime Minister Lee Hsien Loong
Mr Lee later told the Singapore media that shared standards need to be worked out to avoid having different systems in different countries.
"You have to work out access rules - so they may set up an app in Singapore, the app can operate in a different country," he said.
"We have to work out the laws, rules," he added.
"Within the country, if it's overseas, what are the rules which we must apply? These are technical things which we can talk to one another (about) and we should start to work out understandings which facilitate the digital economy."
During a working lunch with Apec leaders, Mr Lee said governments have to equip their people with the skills and confidence to adapt to disruption and thrive in the new world.
He outlined three ways Singapore is doing so. First, by ensuring the education system prepares students, by focusing on content knowledge and modern skills such as critical thinking, as well as emphasising the use of technology at all levels.
Second, by helping adult workers keep their skills up to date via SkillsFuture. Third, by rolling out schemes to retrain displaced workers and match them to available opportunities, among others. - ROYSTON SIM