Amid US-China power rivalry, small states should work together, says PM Lee

SINGAPORE — When dominant nations are engaged in a power rivalry, small states like Singapore can “do little to influence the big powers”.

However, they are not entirely powerless, said Prime Minister Lee Hsien Loong.

There are many opportunities for smaller countries to work together to deepen economic co-operation, strengthen regional integration and build up multilateral institutions, he noted.

“This way, we can strengthen our influence as a group and advance a collective position on issues that matter to us, be they trade, security or technology,” said Mr Lee.

In his keynote address at the opening day of the Shangri-La Dialogue, an annual security summit, on Friday (May 31), Mr Lee also emphasised the need for multilateralism amid the ongoing tensions between the world’s two current superpowers, the United States and China.

Multilateral institutions today “are far from perfect”, as he pointed out that the World Trade Organisation (WTO) — one of the major institutions in the post-war global order — is now “almost paralysed and urgently needs reform”.

No longer is it practical, Mr Lee said, to have multilateral global deals that require a full consensus among the 164 member countries that have hugely diverse interests and philosophies.

On top of that, the WTO was designed for an agricultural and manufacturing-based world economy. But Mr Lee noted that the world has moved on to services and now increasingly digital and intellectual property, which he said “need much more complicated rules”.

Pointing out that the US “has lost faith” in the WTO, it resultantly “often acts unilaterally, imposing tariffs and trade sanctions outside WTO rules”.

The US now prefers negotiating bilateral deals one on one against smaller countries in “trials of strength”, he added.

Doing so gives “more weight to the US’ direct benefits in the disputes at hand than to its broader interests in upholding the multilateral system”, said Mr Lee.

But this approach, he added, has caused concern to many of its friends and allies.

“Singapore cannot afford to adopt the same point of view. Being small, we are naturally disadvantaged in bilateral negotiations,” Mr Lee told the audience.

Building a broader regional and international architecture of co-operation, is required, with Mr Lee adding: “When groups of countries deepen their economic co-operation, they will enhance not just their shared prosperity but also their collective security.

“And with more stake in one another’s success, they will have greater incentive to uphold a conducive and peaceful international order, which will benefit many countries big and small.”

Short of universal trade agreements, Mr Lee noted that countries should at least strive for regional or plurilateral arrangements.

It may be a “second best solution”, but he said that it is a practical way to incrementally build support for lower trade barriers and higher standards, which can then be adopted by other countries.

This was the rationale behind the Trans-Pacific Partnership (TPP), Mr Lee said.

Though the US ultimately withdrew from the TPP, he said that it initially came onboard because it saw the strategic benefits.

The remaining members “fortunately” managed to preserve nearly all that had been negotiated, giving rise to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is now in force.

Other countries such as South Korea and the United Kingdom have expressed interest to join. China is also keeping a close on eye on the CPTPP, said Mr Lee.

He added: “They are not ready to join now, but I hope that they will seriously consider doing so sometime in the future.”

Mr Lee expressed hope that it will become “politically possible” for the US to rethink its position due to the economic and strategic benefits of being a member of the partnership.

‘GREAT GAME OF NATIONS’

Mr Lee spent part of his speech retracing the history of Southeast Asia, pointing out that the region is “no stranger to the great game of nations”, having witnessed the battle for influence among the colonial powers as well as the Second World War.

It was against the backdrop of the Cold War that five South-east Asian countries — Indonesia, Malaysia, the Philippines, Singapore and Thailand — decided to form the Association of Southeast Asian Nations (Asean). Five other countries in the region later joined the regional grouping.

Describing the US-China bilateral relationship as the “most important” in the world today, Mr Lee said: “How the two work out their tensions and frictions will define the international environment for decades to come.”

As he spoke at length on the need for regional co-operation, Mr Lee stressed that this goes beyond trade.

He pointed to Asean as an example, which has provided an effective platform for dialogue and co-operation, deepening ties and maintaining peace among its members.

“Asean works on a basis of consensus,” Mr Lee said. “It makes more progress in some areas than others, because Asean members are not immune to the strategic forces that pull us in different directions. This is the hard reality of co-operation in a region exposed to multiple external influences.”

NEW INITIATIVES FOR REGIONAL COOPERATION

Then there are the emerging new concepts and platforms for regional co-operation amid the geopolitical shifts. Notable among them is China’s Belt and Road Initiative (BRI).

Singapore views it as a “constructive mechanism for China to be positively engaged with the region and beyond”, Mr Lee said.

He cited examples of Singapore’s involvement, such as working with the World Bank to promote financial and infrastructure connectivity, and support professional and legal services to BRI countries.

Projects under the BRI must be economically sound as well as commercially viable and they have to bring long-term benefits to its partners, Mr Lee said. But this has not always been the case, he added, noting that some of the projects “have run into significant problems”.

Mr Lee said: “Overall, the BRI must be open and inclusive, and must not turn the region into a closed bloc centred on a single major economy.”

The BRI should help China to integrate with the world, with Mr Lee stressing that the result should not seek to “divide the world into rival spheres of influence” — but to strengthen globalisation.

There have been other proposals for regional co-operation such as the various concepts of “Indo-Pacific co-operation”, Mr Lee noted.

Though “less fully elaborated or implemented”, he said that these initiatives should strengthen existing co-operation arrangements centred on Asean. Mr Lee cautioned: “They should not undermine them, create rival blocs, deepen fault lines or force countries to take sides.

“They should help bring countries together, rather than split them apart.”