WEBVTT - Live from Singapore: Keeping Globalization Alive Amid 'Geopolitical Climate Change' 0:00:02.720 --> 0:00:09.560 Bloomberg Audio Studios, podcasts, radio news. China is not able 0:00:09.680 --> 0:00:13.800 or winning to replace the US as the underwriter of globalization. 0:00:14.280 --> 0:00:17.200 So we are to quote my Prime Minister in US 0:00:17.200 --> 0:00:21.400 interacting them a state of messy transition. Cromwell world in 0:00:21.440 --> 0:00:26.640 which there was an underwriter an enforcer, and then underwriter 0:00:26.720 --> 0:00:29.760 and enforcer has now decided to become disruptor in chief 0:00:30.320 --> 0:00:32.200 for domestic political reasons. 0:00:41.680 --> 0:00:44.600 I'm Stephanie Flanders, head of Government and Economics at Bloomberg, 0:00:44.720 --> 0:00:47.320 and this is Trumpnomics, the podcast that looks at the 0:00:47.360 --> 0:00:50.839 economic world of Donald Trump, how he's already shaped the 0:00:50.840 --> 0:00:54.000 global economy and modern earth is going to happen next 0:00:57.040 --> 0:01:00.880 This week, I'm sharing a conversation with Singapore's top diplomat, 0:01:01.080 --> 0:01:04.480 Vivian Balakrishnan. If we look back at the global economy 0:01:04.480 --> 0:01:07.039 in twenty twenty five, much of what we might have 0:01:07.160 --> 0:01:11.080 expected from a second Trump term has happened. And then 0:01:11.160 --> 0:01:14.679 some a rupture in the Western Alliance, are withdrawal or 0:01:14.720 --> 0:01:18.000 stepping back from multilateral decision making fora like the G 0:01:18.120 --> 0:01:21.920 twenty and the cop A more aggressive stance towards enemies 0:01:21.920 --> 0:01:25.160 in America's backyard. It's all there, but one thing we 0:01:25.240 --> 0:01:29.440 haven't seen is a global trade war. Though the US, 0:01:29.480 --> 0:01:31.880 we know, has imposed hefty tariffs on all of its 0:01:31.920 --> 0:01:35.480 trading partners, those countries, with the notable exception of China, 0:01:35.880 --> 0:01:39.240 have not fought back. Instead, in effect, they've said, we 0:01:39.280 --> 0:01:40.760 don't like this, but we're darn if we're going to 0:01:40.800 --> 0:01:43.440 make it worse. The US might wish to raise high 0:01:43.520 --> 0:01:46.600 tariff walls around its economy, rest of US are going 0:01:46.640 --> 0:01:49.120 to keep on opening up and if possible, do even 0:01:49.160 --> 0:01:52.920 more trade amongst ourselves. That is a big good news 0:01:52.920 --> 0:01:55.080 story from this year that we shouldn't forget, and I 0:01:55.120 --> 0:01:58.280 was reminded of again last week at the Bloomberg New 0:01:58.320 --> 0:02:02.080 Economy Forum in Singapore, where you sit looking out at 0:02:02.080 --> 0:02:07.320 the mass of container ships in the Singapore Strait. About 0:02:07.600 --> 0:02:10.400 twenty five percent or so of global exports and imports 0:02:10.480 --> 0:02:14.600 passes through that crucial shipping corridor, giving small but super 0:02:14.600 --> 0:02:18.400 successful Singapore a very large stake in sustaining a global 0:02:18.400 --> 0:02:22.640 trading system and incidentally a bird's eye view of everything 0:02:22.680 --> 0:02:27.040 happening in Asia. This country also has a knack of 0:02:27.040 --> 0:02:30.919 producing rather aerodyite public servants, so at the start of 0:02:30.960 --> 0:02:33.800 the forum on November nineteenth, I sat down with one 0:02:33.840 --> 0:02:37.160 of them, Foreign Minister Vivian Balakrishnan, to talk about the 0:02:37.240 --> 0:02:40.240 meaning of the recent trade deal between the US and China, 0:02:40.800 --> 0:02:44.919 what the shifting global landscape means for Asia. He was 0:02:44.960 --> 0:02:47.760 at both the Asian and APEX summits where some of 0:02:47.800 --> 0:02:50.520 those deals were done, and I began by asking him 0:02:50.520 --> 0:02:53.320 whether the new trade partnerships that Singapore and others were 0:02:53.360 --> 0:02:56.600 hoping to build without the US could really reshape the 0:02:56.639 --> 0:02:57.840 future of global trade. 0:03:03.520 --> 0:03:07.400 Well, there's a quote attributed to Ernest Hemingway, how did 0:03:07.440 --> 0:03:12.440 you go bankrupt? It says two ways, gradually and then suddenly. 0:03:12.639 --> 0:03:15.919 So hold that thought in mind. This year has been 0:03:15.960 --> 0:03:21.160 the year of sudden changes, but actually the gradual changes. 0:03:21.240 --> 0:03:24.440 The pressure has been building up for a long time. 0:03:25.040 --> 0:03:27.160 The first point I wanted to leave with you is 0:03:27.400 --> 0:03:32.480 the role of the United States for the last eight decades. Actually, 0:03:32.480 --> 0:03:36.560 it is historically unprecedented. The ultimate winner of the Second 0:03:36.560 --> 0:03:40.480 World War, forty percent of global GDP, that was his 0:03:40.600 --> 0:03:45.360 share of global GDP, decided, instead of conquering and eliminating 0:03:45.400 --> 0:03:50.680 the Vanquish, rebuilt Germany Europe through the Marshall Plan, and 0:03:50.760 --> 0:03:57.720 it set really a rules based globalization with economic integration 0:03:57.840 --> 0:04:02.880 at the core. And this is highly, highly unusual and unprecedented. 0:04:03.560 --> 0:04:07.120 So that's the first point. It is about the US. 0:04:07.560 --> 0:04:12.440 Second point is that actually the pressures on the US 0:04:13.120 --> 0:04:15.240 to give up on this has been building up for 0:04:15.240 --> 0:04:17.120 a long time. And what I mean, if you think 0:04:17.160 --> 0:04:20.279 about it, what the US did for eight decades was 0:04:20.320 --> 0:04:28.640 to provide first the market, second technology, third capital, and 0:04:29.000 --> 0:04:33.400 rules based economic integration. The first beneficiary of it, apart 0:04:33.400 --> 0:04:36.960 from Europe, was Japan, and then you had the Asian 0:04:37.080 --> 0:04:41.280 tigers Hong Kong career to Singapore and then the rest 0:04:41.279 --> 0:04:46.440 of Southeast Asia. But the real winner of rules based 0:04:46.960 --> 0:04:50.880 free trade has actually been China. And the US is 0:04:50.920 --> 0:04:54.280 only two hundred and forty nine years. It has never 0:04:54.440 --> 0:04:59.280 met a peer competitor with the scale, the ability, and 0:04:59.320 --> 0:05:03.400 the willingness to reorder the world in a way that's 0:05:03.440 --> 0:05:04.280 favorable to it. 0:05:04.760 --> 0:05:09.400 But the point is that China, if you. 0:05:09.360 --> 0:05:12.640 Look at this per capita GDP, it's still a middle 0:05:12.680 --> 0:05:16.760 income country. And China is not able or willing to 0:05:16.839 --> 0:05:21.960 replace the US as the underwriter of globalization. So we are, 0:05:22.120 --> 0:05:25.440 to quote my Prime Minister, in an interregnum, a state 0:05:25.520 --> 0:05:28.920 of messy transition from a world in which there was 0:05:29.080 --> 0:05:34.240 an underwriter an enforcer, and that underwriter and enforcer has 0:05:34.279 --> 0:05:38.520 now decided to become disruptor in chief for domestic political 0:05:38.560 --> 0:05:44.279 reasons because after eight decades of providing capital, technology, and markets, 0:05:44.640 --> 0:05:47.359 what the middle class in America has seen is the 0:05:47.440 --> 0:05:55.800 industrialization russ belts, hopelessness and middle income stagnation. And guess 0:05:55.839 --> 0:06:01.520 what elections are local. So it is a completely legitimate 0:06:01.600 --> 0:06:04.600 question for the American water to say, wait a minute, 0:06:04.640 --> 0:06:07.800 why should we underwrite in blood and treasure, this system 0:06:07.880 --> 0:06:11.000 which seems to have profited the rest of the world 0:06:11.240 --> 0:06:16.080 and especially a big peer competitor, And I think we 0:06:16.120 --> 0:06:19.560 need to pull back. So you see my point about 0:06:19.640 --> 0:06:22.960 gradually and then suddenly you know it's like an iceberg 0:06:23.839 --> 0:06:28.640 or a continental ice shelf falling. But actually the climate 0:06:28.680 --> 0:06:33.719 warming was predated that. So my point is what we're 0:06:33.760 --> 0:06:36.400 witnessing today is not just a change of whether this 0:06:36.560 --> 0:06:40.839 is real climate change, dual political climate change. 0:06:41.200 --> 0:06:42.680 So that's contact setting. 0:06:43.160 --> 0:06:47.560 I think it's historically unprecedented also to have a single 0:06:48.400 --> 0:06:53.359 global superpower almost voluntarily step back from a lot of 0:06:53.360 --> 0:06:55.680 its obligations, not be forced to do so, not lose 0:06:55.680 --> 0:06:57.960 a war, but just decide I don't want to do 0:06:58.000 --> 0:06:58.560 this anymore. 0:06:58.720 --> 0:07:02.039 Yes, an unusual to have such a benige hegemon in 0:07:02.080 --> 0:07:06.040 the first place, and for us now to say, where. 0:07:05.800 --> 0:07:06.880 Did that hagamon go? 0:07:07.839 --> 0:07:11.360 I'm saying, if you take a longer view of history 0:07:12.080 --> 0:07:15.200 in jee politics, the point is this was a unique period. 0:07:15.440 --> 0:07:17.720 I've tried to go back in it. I can't find 0:07:17.760 --> 0:07:20.760 another period in history when we had such a benine 0:07:20.760 --> 0:07:22.440 hegamon when you just. 0:07:22.400 --> 0:07:24.480 Think back even just a few years ago, and then 0:07:24.520 --> 0:07:27.320 we would have been on this stage talking about decoupling. Yes, 0:07:27.360 --> 0:07:30.840 and that may be the climactic change, to distinguish from 0:07:30.880 --> 0:07:33.720 the change in the weather, as you've said. But the 0:07:33.760 --> 0:07:36.280 Biden administration, I think for many of it, of the 0:07:36.440 --> 0:07:40.840 US allies, it felt that the US was asking countries 0:07:40.880 --> 0:07:43.920 to choose between the US and China, and that was 0:07:43.920 --> 0:07:49.680 obviously challenging. Nowhere more than here, President Trump has had 0:07:49.680 --> 0:07:54.840 a much many people would say, less consistent, certainly more freewheeling, 0:07:55.680 --> 0:07:59.200 unilateralist approach. It feels a little bit like the world 0:07:59.280 --> 0:08:01.800 is less divided between US and China now and more 0:08:01.840 --> 0:08:04.800 the US and the rest of the world just left 0:08:04.840 --> 0:08:07.760 in a mess. Well, is that easier or harder for well. 0:08:07.760 --> 0:08:10.880 First of all, the American ambassador is here, so I'm 0:08:10.880 --> 0:08:14.760 not here to be an apologist. But I would say 0:08:14.920 --> 0:08:20.160 President Trump as a person in fact, has been uniquely 0:08:20.400 --> 0:08:21.760 consistent for decades. 0:08:22.160 --> 0:08:22.840 What do I mean? 0:08:23.040 --> 0:08:26.360 Watch the interview with Operah Winfrey back in nineteen eighty eight, 0:08:26.680 --> 0:08:30.520 his views on war, anti war, his views on free trade. 0:08:31.760 --> 0:08:34.640 It's an avenue for America to be taken advantage of 0:08:34.840 --> 0:08:38.640 his views on business in a main street real estate 0:08:38.679 --> 0:08:42.800 way as opposed to Wall Street and financial engineering. 0:08:43.000 --> 0:08:47.080 His views on immigration actually have been remarkedably. 0:08:46.520 --> 0:08:49.599 Consistent, and I think people don't give enough marks for 0:08:49.760 --> 0:08:53.280 that point. So he is consistent. It's just that his 0:08:53.520 --> 0:08:58.320 methodology his presentation is somewhat novel, and people get react 0:08:58.360 --> 0:09:01.199 to that. But my point is American policy and the 0:09:01.240 --> 0:09:05.600 President Trump in fact is reflecting long held, deep convictions. 0:09:06.480 --> 0:09:09.520 I think you are right. I guess the exception to that, 0:09:09.760 --> 0:09:11.600 and I'm interested in whether you read it the same 0:09:11.600 --> 0:09:14.640 way you've been at the recent meetings with your Prime 0:09:14.679 --> 0:09:18.560 Minister in Malaysia and Korea, where we did see this 0:09:19.440 --> 0:09:22.280 deals between the US and China. Yes, but it will 0:09:22.320 --> 0:09:24.200 not have been lost on many of the people around 0:09:24.240 --> 0:09:26.520 the table. That China was ending up with a relatively 0:09:26.559 --> 0:09:30.640 better position than many of the other countries in the 0:09:30.640 --> 0:09:33.080 region who had thought that they were going to be 0:09:33.120 --> 0:09:36.720 an alternative to China. For US manufacturers, well, that feels 0:09:36.760 --> 0:09:41.160 a little inconsistent with wanting to wean American industry off 0:09:41.559 --> 0:09:42.440 Chinese manufacers. 0:09:42.440 --> 0:09:47.240 Well, again, I would distinguish between strategic and tactical. I 0:09:47.240 --> 0:09:50.080 think what we've witnessed so far is the tactical pause. 0:09:50.960 --> 0:09:54.400 The fundamental problem in the US and China is an 0:09:54.480 --> 0:09:59.320 almost complete lack of strategic trust, and that means each 0:09:59.360 --> 0:10:02.560 side has to assume the worst of each other, and 0:10:02.640 --> 0:10:06.959 even if you're taking precautions, it's viewed as escalatory. Both 0:10:07.000 --> 0:10:10.959 sides have identified pain points, and I think what you've 0:10:10.960 --> 0:10:15.200 seen so far is not a strategic realignment or southern 0:10:15.280 --> 0:10:18.679 dawn of strategic trust, is that both sides have decided 0:10:18.800 --> 0:10:23.920 they need time, they need a tactical pause whilst you 0:10:24.000 --> 0:10:26.520 get on with the real business. And the point about 0:10:26.520 --> 0:10:30.880 decoupling is worth unpacking because what we are witnessing the 0:10:30.880 --> 0:10:34.360 world right now is a couple of phenomena. Number One, 0:10:34.440 --> 0:10:38.760 you've witnessed the weaponization of everything, weaponization of the dollar, 0:10:38.840 --> 0:10:45.160 weaponization of finance, weaponization of critical minerals, global supply choins. 0:10:45.280 --> 0:10:50.040 Interdependency used to be a good thing. Now it's a vulnerability. 0:10:50.840 --> 0:10:54.160 But my point about weaponization of everything, you know, Newton's 0:10:54.240 --> 0:10:57.880 third law applies in diplomacy too. For every action, there's 0:10:57.880 --> 0:11:02.760 an equal and opposite reaction. So the weaponization where everything 0:11:02.760 --> 0:11:06.000 has led to an erosion of trust, has led to 0:11:06.040 --> 0:11:10.120 a need to assume the worst and to prepare for it. 0:11:10.200 --> 0:11:13.080 And in the absence of trust, it's very hard to 0:11:13.200 --> 0:11:16.360 actually have strategic alignments. So that's first part. What you're 0:11:16.400 --> 0:11:21.120 witnessing now is a tactical pause. The strategic problem remains. 0:11:21.880 --> 0:11:25.040 The next aspect of what's going on now is the 0:11:25.080 --> 0:11:29.120 fracturing of supply chains. And it's not an ideological point, 0:11:29.280 --> 0:11:32.720 but I think especially during COVID, you found it. 0:11:32.760 --> 0:11:34.520 Even simple things like making. 0:11:34.280 --> 0:11:37.760 A mask, which it's not rocket science, but the essential 0:11:37.800 --> 0:11:42.200 components were not within reach and everyone was panicking and 0:11:42.240 --> 0:11:44.720 you didn't have access to it. So the fracturing of 0:11:44.800 --> 0:11:48.000 supply chains in the name of national security and in 0:11:48.080 --> 0:11:53.240 search of resilience actually means a world which hitherto has 0:11:53.320 --> 0:11:58.600 been based on efficiency, is now building supply chains on 0:11:58.640 --> 0:12:04.480 a basis of near ding on shoring French showing. Economically, 0:12:04.480 --> 0:12:08.280 what that must mean is some inflation because you're no 0:12:08.360 --> 0:12:12.280 longer choosing the cheapest and the best, most efficient, You're 0:12:12.320 --> 0:12:16.080 now having other considerations. So watch that a bottom inflation. 0:12:16.760 --> 0:12:21.560 The third point is the global comments. I've been involved 0:12:21.559 --> 0:12:24.000 in this game long enough, so I'll give you an example, 0:12:24.160 --> 0:12:27.400 the Paris Climate Change Agreement. The only reason that got 0:12:27.440 --> 0:12:30.480 done is because America and China are on the same side, 0:12:30.880 --> 0:12:33.840 and we're able to drag the rest of us an 0:12:33.960 --> 0:12:39.840 imperfect but important agreement. Today if the two main players 0:12:40.200 --> 0:12:42.920 are not in the same room, and it goes further 0:12:43.000 --> 0:12:43.280 than that. 0:12:44.480 --> 0:12:46.960 In fact, it's not just a. 0:12:46.840 --> 0:12:49.199 Matter of picking out your marbles and leaving the game, 0:12:49.320 --> 0:12:54.040 but you're actually disrupting the game. And my worry is 0:12:54.080 --> 0:12:56.240 that we're going to be unable to deal with the 0:12:56.240 --> 0:13:01.800 global comments. It means climate change, pandemic, the challenges from AI. 0:13:02.960 --> 0:13:06.760 We won't be able to respond adequately to it because 0:13:06.840 --> 0:13:13.079 the two key players either are disrupting actively or are 0:13:13.160 --> 0:13:16.800 spoiling for a fight and are certainly not willing to 0:13:16.920 --> 0:13:23.240 restrain themselves with multilateral rules imposed by lil Putin countries 0:13:23.480 --> 0:13:26.079 begins medium and small elsewhere. 0:13:27.080 --> 0:13:28.400 I hope that's not too depressing. 0:13:41.080 --> 0:13:46.319 It just seems a muddier picture than the decoupling team US. 0:13:46.679 --> 0:13:47.240 It's resty. 0:13:47.400 --> 0:13:51.320 But as your concern, the long term trend, yes, I 0:13:51.360 --> 0:13:54.280 mean someone has likened it to a couple saying we're 0:13:54.320 --> 0:13:56.160 going to divorce in ten years, but we have to 0:13:56.200 --> 0:13:59.400 live together before then. You still need. Long term trend 0:13:59.600 --> 0:14:01.679 is dec coupling between the US and China. 0:14:01.840 --> 0:14:06.880 I think without the strategic trusts, the logic for decoupling, 0:14:08.520 --> 0:14:12.800 at least partially in the name of national security and 0:14:13.480 --> 0:14:18.120 anxiety over competitiveness, will continue to play out. 0:14:18.720 --> 0:14:20.720 And that's that's what we're witnessing. 0:14:20.840 --> 0:14:22.920 But if I can come back to where you started 0:14:22.960 --> 0:14:25.680 with a piece of good news, I said, why hasn't 0:14:25.680 --> 0:14:28.320 the rest of the world retaliated? I think a couple 0:14:28.360 --> 0:14:31.840 of reasons. Number One, they're a far bigger elephant or 0:14:31.960 --> 0:14:35.560 ego than the rest of us. So what's the point 0:14:35.600 --> 0:14:39.560 of retaliating when in fract the little guy will be 0:14:39.640 --> 0:14:43.320 the ultimate loser. So that's the first thing. Second, and 0:14:43.520 --> 0:14:46.920 I'm coming to your good news. If you leave aside 0:14:47.000 --> 0:14:50.840 the two big powers, and if you think if you 0:14:50.920 --> 0:14:56.400 open a World Atlas and draw a diagonal Europe, the 0:14:56.440 --> 0:15:00.800 Middle East, South Asia, Southeast Asia, Australi in New Zealand, 0:15:00.840 --> 0:15:03.600 and then you draw two spokes, one to Northeast Asia 0:15:03.640 --> 0:15:10.800 particular Japan Career, and another spoke southwest through Africa and 0:15:10.920 --> 0:15:11.720 South America. 0:15:12.520 --> 0:15:12.920 Guess what. 0:15:13.480 --> 0:15:17.400 In fact, there is still a majority of countries and 0:15:17.440 --> 0:15:20.760 even I would say the majority of global GDP, that 0:15:21.000 --> 0:15:26.479 still wants to operate on supply chain efficiencies, on economic integration, 0:15:26.680 --> 0:15:31.040 on rules based globalization. The only thing is the enforcer 0:15:31.360 --> 0:15:34.360 in chief is no longer there and there is a 0:15:34.400 --> 0:15:36.760 need therefore to assemble or coalition of the willing. So 0:15:36.800 --> 0:15:40.080 what you're watching now, all that's scurrying around by medium 0:15:40.120 --> 0:15:46.960 and small economies is to keep globalization alive, reform what 0:15:47.080 --> 0:15:49.880 needs to be reformed, and there's a lot that needs reform, 0:15:50.040 --> 0:15:53.560 but to work together in a more collegiate way, knowing 0:15:53.640 --> 0:15:57.320 full well that the underwriter, the enforcer, is not going 0:15:57.400 --> 0:16:00.120 to be doing the heavy lifting. So that's where I 0:16:00.120 --> 0:16:02.640 think there is a glimmer of hope. And that's why 0:16:02.800 --> 0:16:05.920 you know, my Prime Minister and I've been discovering around 0:16:06.440 --> 0:16:10.040 to regional and international conferences and the good news I 0:16:10.080 --> 0:16:14.440 agree with you. The majority people in fact want some order, 0:16:15.320 --> 0:16:21.160 some stability, and some benefits, economic benefits from working together, 0:16:21.520 --> 0:16:25.280 from inter operating, And what we are hoping ultimately is 0:16:25.320 --> 0:16:28.080 that when things settle down between the two big bodies, 0:16:28.880 --> 0:16:34.040 they will then rediscover the benefits of globalization. 0:16:34.600 --> 0:16:36.440 One of the initiatives that you had in the summer 0:16:36.600 --> 0:16:39.880 was with the Gulf and the GCC. Do you see 0:16:39.880 --> 0:16:40.960 that moving forward? 0:16:41.240 --> 0:16:43.720 Well, if you look earlier this year, we had that 0:16:43.800 --> 0:16:45.800 when we had an RC and some that we included, 0:16:45.840 --> 0:16:49.720 the GCC and China in Singapore were members of both 0:16:49.840 --> 0:16:54.600 the CPTPP and our CP which are big mega free 0:16:54.600 --> 0:16:59.080 trade deals. We're trying to convince the European Union, who 0:16:59.240 --> 0:17:03.480 is also a flexy pro trade pro rules. 0:17:04.080 --> 0:17:06.320 Are they going to join? No, I think that's a 0:17:06.359 --> 0:17:07.120 bridge too far. 0:17:07.840 --> 0:17:12.000 But can we get a partnership between the European Union 0:17:12.119 --> 0:17:15.480 and the CPTPP, especially a CPTPP which is. 0:17:15.440 --> 0:17:18.679 Expanding, You've got to think we need a bit. 0:17:18.800 --> 0:17:21.159 I know, I know, In fact, I. 0:17:21.119 --> 0:17:23.440 Think that's why everyone talks about it, honestly. 0:17:23.400 --> 0:17:23.800 I know. 0:17:24.080 --> 0:17:27.720 But if it's strip aside the labels and the names, 0:17:27.960 --> 0:17:32.120 I mean, the point is, is there benefit from globalization, 0:17:32.760 --> 0:17:38.800 from efficiency, from interoperability, from standards, from peaceful resolution of disputes, 0:17:39.640 --> 0:17:45.560 including trade disputes. The answer is unequivocally yes. But we 0:17:45.680 --> 0:17:48.359 need to do it now and everyone needs to chip in. 0:17:48.880 --> 0:17:52.320 So I think the EU is a natural partner with 0:17:52.440 --> 0:17:55.240 the CPTP. So think of the EU and the Pacific. 0:17:55.440 --> 0:18:00.200 Can we construct something that cuts a diagonal across go 0:18:00.560 --> 0:18:03.680 and it's Africa keen on this. I think they are 0:18:04.240 --> 0:18:07.080 South America. I mean, you may be surprised, even little Singapore. 0:18:07.119 --> 0:18:14.120 We've signed free trade deals with Mercasol, which is Argentina, Brazil, Ecuador, Paraguay, Uruguay. 0:18:14.760 --> 0:18:17.240 We've even signed a free trade agreement with the Pacific 0:18:17.280 --> 0:18:23.040 Alliance Mexico, Colombia, Chile. So the point is you'll be surprised. 0:18:23.240 --> 0:18:28.080 The appetite for economic integration remains, and that's what Singapore 0:18:28.160 --> 0:18:28.720 is working now. 0:18:28.720 --> 0:18:31.240 Of course, I'll tell you, of course we are biased. 0:18:31.680 --> 0:18:35.280 This is Manhattan without upstate New York, or this is 0:18:35.359 --> 0:18:39.359 one fifth of Rhode Island without continental United States, or 0:18:39.400 --> 0:18:43.359 if you want another uncomfortable analogy, Singapore is just twice 0:18:43.359 --> 0:18:46.840 the size of Gaza, but with three times the population. 0:18:47.640 --> 0:18:50.920 So we're a tiny place in which our trade volume 0:18:51.000 --> 0:18:54.360 is three times our GDP. So I hope you understand 0:18:54.359 --> 0:18:58.600 when we promote free trade, it's lifeblood. It's not a 0:18:58.680 --> 0:19:04.000 negotiating point, right, And when we say rules are better 0:19:04.040 --> 0:19:07.360 than the alternative, because the alternative is right, it might 0:19:08.280 --> 0:19:12.440 be it's beautiful and small. It's irrelevant. So I will 0:19:12.480 --> 0:19:15.400 confess this is a self interested argument. 0:19:15.920 --> 0:19:18.720 But you've talked about importance of rules, but also a 0:19:18.800 --> 0:19:20.360 country is working together. 0:19:20.240 --> 0:19:21.719 Yes, absolutely, not enforced. 0:19:21.920 --> 0:19:24.960 Should the Southeast Asian economies, even the Asian countries have 0:19:25.040 --> 0:19:28.200 worked together more in negotiating these trade deals with the US. 0:19:28.240 --> 0:19:30.440 You talk, No, I don't. I don't buy nactual arm 0:19:30.480 --> 0:19:31.480 wrestling you describe. 0:19:31.640 --> 0:19:34.959 Yes, No, I don't think that was necessary, not certainly, 0:19:35.000 --> 0:19:37.840 not at this stage. I mean, if you look at 0:19:37.880 --> 0:19:41.440 Asian as a horse, you know the terris range from 0:19:41.720 --> 0:19:45.720 ten percent, nineteen percent, maybe twenty percent, and those. 0:19:45.680 --> 0:19:46.680 Numbers keep changing. 0:19:47.080 --> 0:19:53.280 Anyway, my point is, don't overreact to the headline of 0:19:53.280 --> 0:19:53.800 after Day. 0:19:54.560 --> 0:19:55.760 Understand what's going on. 0:19:56.000 --> 0:19:59.720 So if you now bring your zoom lens to Arcian, 0:20:00.400 --> 0:20:04.520 have we systematically brought down our trade barriers non tariff barriers? 0:20:05.200 --> 0:20:07.320 Is RCN fulfilling its mission? 0:20:07.359 --> 0:20:11.479 Of becoming a single production zone, a single investment zone. 0:20:11.840 --> 0:20:15.080 Has there been economic growth in URSA? What are the 0:20:15.119 --> 0:20:17.560 prospects of RCN in the next two decades. We think 0:20:17.560 --> 0:20:20.320 we can double our combined GDP. If you add up 0:20:20.320 --> 0:20:23.280 the combined GDP of RCN, which by the way, has 0:20:23.280 --> 0:20:28.000 a population slightly larger than the EU, we're about number five. 0:20:28.960 --> 0:20:30.800 And because half of population is. 0:20:30.800 --> 0:20:34.199 Below the age of thirty five and our middle class 0:20:34.280 --> 0:20:38.200 is growing, the long term prospects are right. So long 0:20:38.320 --> 0:20:42.040 as we don't overreact, we don't do stuff that actually 0:20:42.080 --> 0:20:44.879 boomer ranks back on us. And we just look at 0:20:44.880 --> 0:20:48.440 what we did this year. We upgraded the RCAN agreement 0:20:48.600 --> 0:20:51.879 on trading goods within r CM, we upgraded the rc 0:20:52.040 --> 0:20:55.520 and China Free Trade Agreement, and we're still looking at 0:20:55.560 --> 0:20:59.359 building more more bridges across the world. So my point 0:20:59.400 --> 0:21:03.199 is that in fact, Southeast Asia is a zone of 0:21:03.280 --> 0:21:04.600 hope and growth. 0:21:05.560 --> 0:21:08.960 The key thing is to focus on. 0:21:09.080 --> 0:21:11.560 The long term. And what does long term mean? It 0:21:11.680 --> 0:21:15.600 means technology. Bearing in mind that we've got three technological 0:21:15.680 --> 0:21:21.600 revolutions going on in real time simultaneously, AI, biotech, renewable energy, 0:21:22.240 --> 0:21:25.960 and we're focusing on building up the infrastructure for that. 0:21:26.119 --> 0:21:30.160 With focusing on educating a workforce, work creaty for that 0:21:30.240 --> 0:21:33.880 kind of work, the world of AI and robotics, and 0:21:33.920 --> 0:21:37.400 we're focusing on integrating, we can still increase our intrascient 0:21:37.480 --> 0:21:42.879 trades significantly. And what about Asian Africa, Asian South America. 0:21:43.000 --> 0:21:45.760 You know, it's some people call it South South. I 0:21:45.800 --> 0:21:48.800 don't really like term, but my point is there is 0:21:48.840 --> 0:21:52.639 still a majority in favor of this. I would also 0:21:52.680 --> 0:21:59.920 point out the CPTPP began as four tiny states Singapore, Bruna, 0:22:00.880 --> 0:22:05.040 New Zealand and Chile, and it only became TPP when 0:22:05.119 --> 0:22:10.119 America and Japan came in. Now we knew by the 0:22:10.160 --> 0:22:15.280 time Hillary Clinton had to withdraw from her support from 0:22:15.320 --> 0:22:17.359 the TPP, which in fact she had a lot to 0:22:17.400 --> 0:22:21.480 do with starting, that the cause of free trade was 0:22:21.600 --> 0:22:25.639 in political problem. And I think all of us in 0:22:25.680 --> 0:22:29.200 this room, who I would say are probably instinctive free traders, 0:22:29.240 --> 0:22:32.480 need to realize that we didn't make the political case 0:22:32.880 --> 0:22:38.440 for it. And you have to convince your local electorate 0:22:39.520 --> 0:22:44.840 the jobs and wages and opportunity come from free trade. Otherwise, 0:22:45.400 --> 0:22:50.080 if you don't understand the political reality that for every 0:22:50.119 --> 0:22:53.439 free trade agreement, they are winners and losers. You need 0:22:53.760 --> 0:22:57.800 to put seat belts on. You need to have compensatory mechanisms. 0:22:57.960 --> 0:23:01.280 And whilst you don't expect governments to choose winners and 0:23:01.359 --> 0:23:06.359 losers at the enterprise level, but governments do need to 0:23:06.400 --> 0:23:13.119 be activists infrastructure, education, pro enterprise regulatory environments. 0:23:13.600 --> 0:23:15.760 You do need an active government. 0:23:16.119 --> 0:23:21.680 But what you don't want is completely state directed capitalism 0:23:21.720 --> 0:23:24.000 where you pick winners and lois. So we think that's 0:23:24.200 --> 0:23:28.160 ultimately a dead end. So anyway, my point is, watch 0:23:28.240 --> 0:23:31.480 this space. That's why there's still buzz in this part 0:23:31.520 --> 0:23:32.000 of the world. 0:23:32.320 --> 0:23:33.600 We're going to run out of time. So I want 0:23:33.600 --> 0:23:36.040 to just quickly ask you I started talking about the US. 0:23:36.400 --> 0:23:39.880 I mean you have said obviously trade is the lifeblood 0:23:39.920 --> 0:23:42.479 of Singapore, and you're absolutely at the center of looking this. 0:23:42.800 --> 0:23:45.800 The one country that despite all these tariffs and trade 0:23:45.840 --> 0:23:48.480 wars by the US, the one country that has managed 0:23:48.520 --> 0:23:52.399 to increase its export growth this year's China. See that 0:23:52.520 --> 0:23:58.760 country in many ways doubling down on a focus on manufacturing, 0:23:58.920 --> 0:24:02.119 on export led growth, when many economists might have said 0:24:02.520 --> 0:24:04.600 long term they have to be on a different path. 0:24:05.240 --> 0:24:08.880 How destabilizing is that for this region, especially now they 0:24:08.880 --> 0:24:10.240 have a slightly more well. 0:24:10.040 --> 0:24:12.960 I think what you're referring to you're being too delicate. 0:24:13.240 --> 0:24:17.600 You're referring to over capacity. Actually, the world has had 0:24:17.720 --> 0:24:22.920 unsustainable imbalances for some time. If you outsource all manufacturing 0:24:22.960 --> 0:24:27.680 to China, you outsource all energy to Russia, and you 0:24:27.800 --> 0:24:31.800 outsource security to America, I'm referring to the EU. 0:24:33.200 --> 0:24:34.760 That's not a sustainable model. 0:24:35.359 --> 0:24:38.760 And if the EU wants sort of strategic autonomy or independence, 0:24:39.240 --> 0:24:42.280 it needs to get a grip on manufacturing, on its 0:24:42.359 --> 0:24:47.840 industrial capacity, on its defense, and on its energy policies. 0:24:47.960 --> 0:24:52.040 And I'm just giving you one example. In the case 0:24:52.080 --> 0:24:56.760 of China, it's worth also reflecting because China became the 0:24:56.800 --> 0:25:00.520 manufacturing center well and enjoying economies of skin. And by 0:25:00.560 --> 0:25:05.159 the way, I must say, Chinese workers happened to be 0:25:05.240 --> 0:25:08.640 really hard working and efficient. I don't think you can 0:25:08.680 --> 0:25:12.640 follow China for that. But a world in which all 0:25:12.680 --> 0:25:17.880 manufacturing is accumulating on one half, trade surpluses are accumulating there, 0:25:18.000 --> 0:25:20.520 but those trade surplus are being recycled it used to 0:25:20.560 --> 0:25:21.840 be recycled. 0:25:21.280 --> 0:25:22.560 Into T bills. 0:25:22.880 --> 0:25:26.040