US needs to step up economic engagement with Asia, Singapore says

Deputy PM Heng Swee Keat said Washington must come up with an ‘equally substantial alternative’ to the CPTPP trade pact Trump ditched in 2017
He also said it is critical that there are safeguards in place to ensure China-US competition ‘doesn’t veer off course into conflict’

Singapore

Bloomberg

Published: 8:58am, 1 Dec 2021

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The US needs to increase economic engagement in Asia with an “equally substantial alternative” to the 11-country Pacific trade pact Donald Trump exited nearly five years ago, Singapore Deputy Prime Minister Heng Swee Keat said.

“Over the past decades, the US security presence has brought stability and peace in the region,”’ Heng said at a lecture on Tuesday focused on foreign policy issues. “For this to continue into the next decades, the US cannot afford to be absent from the region’s evolving economic architecture.”

The Biden administration has ruled out joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) due to domestic opposition, even as China has formally applied to join the pact.

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Heng said US economic links to the region were as vital as new initiatives like Aukus, a security partnership with the UK and Australia, as well as the four-nation Quad.

“It is just as, if not more, important for the US to be economically engaged,” Heng said. “If not through the CPTPP, then it must have an equally substantial alternative.”

While the US will initiate a new Indo-Pacific economic framework next year with Commerce Secretary Gina Raimondo leading those discussions, Heng expressed concern that the Biden administration is struggling to articulate that vision.

“What is worrying is that in terms of building the framework to facilitate even greater levels of engagement activities, the US has not quite done so,” Heng said in response to a question from the audience.

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He earlier said in his speech that Southeast Asia, which counts the US as its biggest investor, is looking forward to the details of this framework.

The Association of Southeast Asian Nations (Asean) must work with any country besides the US and China to remain stable and prosperous, Heng said. The bloc also wants to deepen economic ties with Japan, South Korea and the European Union as well as remain open to Latin America and Africa, he added.

While the US and China will compete, it is critical that there are safeguards in place to ensure competition “doesn’t veer off course into conflict,”Heng said.

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It is “worrying” that the voices of restraint have diminished, in part due to the disappointment felt by the US business community who used to advocate for closer economic ties with China and weaker relationships during the pandemic, he said.

“It is imperative that the US and China come to a new equilibrium,” as the cost of decoupling from an interconnected economic system will be very high Heng said.

“Any clash between the world’s two largest economies will only be to the detriment of themselves and the world.”

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