Ms Jessica Tan, Deputy Speaker, Parliament of Singapore,

Dr Ngozi Okonjo-Iweala, Director-General, World Trade Organization,

Mr Ng Boon Heong, Chief Executive Officer, Temasek Foundation,

Dr Said El Hachimi, Senior Counsellor, Head Parliamentary & IGO Partnerships and Outreach, World Trade Organization,

1. I am very happy to join you this morning for the RSIS-WTO Parliamentarian Workshop. Let me take this opportunity to thank the World Trade Organization (WTO) and Temasek Foundation for their tremendous support in making this event possible. This is the first time we are convening the workshop in-person since the COVID outbreak in 2020.

Distinguished guests, ladies and gentlemen,

2. The optimism that the end of the Cold War would bring an era of unprecedented growth has receded. We are living in a more disorderly, fragmented, and competitive world.
3. The challenges we face have far reaching consequences. The struggle for regional supremacy among major powers has pushed geoeconomics and beggar-thy-neighbour policies to the forefront. These geopolitical manoeuvrings have threatened to erode global trade architectures, all of which were created through painstaking efforts.  The United Nations Development Programme (UNDP) reports that the trade war among major powers is estimated to have reversed more than three years of global value chain growth.  This is a serious concern as global value chains are the lifeblood of trade-dependent economies such as Singapore.
4. Likewise, the COVID-19 pandemic has significantly undermined economic dynamism. According to the Asia-Pacific Economic Cooperation (APEC) Policy Support Unit, from 2021 to 2022, the region’s economic growth shrunk by 3.5 percent while the volume of international trade in terms of merchandise imports decreased from 16.1 to 4.3 percent due to the ongoing pandemic and the closing of borders. The decline in cross-border activities is not unexpected, given that China’s economic slowdown during the pandemic has had a negative impact on economic productivity in the region.

The pandemic also resulted in increasing protectionism.  The Organisation for Economic Cooperation and Development (OECD) recent trade restrictiveness index report reveals that during the pandemic, there was a five-fold increase in service trade barriers across 22 sectors, including legal and accounting services. These trends are likely to intensify.  As the pandemic has forced many companies to shut down and lay off workers, the temptation remains for governments to implement protectionist policies aimed at bailing out domestic industries that are affected by the pandemic and minimising increases in unemployment.

5. Meanwhile, the conflict in Ukraine threatens the integrity of global supply chains. The cost of essential commodities such as wheat, fertilizers, oil, and gas has risen by more than 10 percent. The conflict has also caused uncertainties over the exports of wheat and cereals from Ukraine.  With no signs of military de-escalation, there are heightened risks of either Moscow or Kyiv backing out of the UN-backed grain deal, which will ultimately worsen global food shortages. The United Nations Food and Agriculture Organisation (FAO) warns of a looming food crisis, if the food accessibility problems generated by the conflict are not adequately addressed.
6. Climate change has also posed challenges to international trade.  The OECD estimates that a 1.6 to 3.6 degree Celsius increase by 2060 can cause 1 to 3.3 percent loss of global annual gross domestic product (GDP).  Rising temperature and sea levels damage critical trade infrastructures such as roads, railway systems and waterways, adversely affecting the flow of goods and services.  Similarly, extreme weather patterns in the form of heatwaves, floods, and El Nino and La Nina, can reduce crop yields and tempt governments to impose restrictive measures on crop exports, undercutting international trade in the food and agriculture sectors.

These developments provide the backdrop to the issues which we will discuss during this workshop.

Distinguished guests,

7. As someone who represented Singapore at senior officials meetings of the WTO from 1994 – 2000 and was involved in organising the first WTO Ministerial Conference held in Singapore in December 1996, I have been questioning whether we could have done better over the past thirty years. The three core functions of the WTO are: to monitor and implement existing trade agreements; to negotiate new agreements, and to settle disputes.  However, we should have been more effective in implementing existing trade agreements.  Few new multilateral trade agreements have been concluded in recent years.  And the demise of the WTO Appellate Body has undermined the dispute settlement system, the most significant outcome in the 1994 agreements which gave birth to the WTO.

I have felt that one weakness in international trade negotiations is that the negotiators have only been speaking with fellow negotiators.  We have been remiss in not engaging parliamentarians, NGOs and the wider community within our societies.  This has resulted in a lack of recognition in domestic debates of WTO member economies of the benefits of the multilateral rules-based trading system.

8. At the global level, the World Trade Organisation (WTO) is committed to strengthening the multilateral rules-based system. The WTO has been supporting the facilitation of new trade rules, maintaining regular dialogues between governments and non-government actors to enhance trade cooperation, and proactively supporting trade-oriented development to ensure that the developing world will not be left behind.
9. At the regional level, there have been substantial efforts in bolstering the regional multilateral trade architecture since the end of Cold War. Economies in the Asia-Pacific have embraced economic openness and deepened trade-oriented interdependence. This has boosted regional economic growth and generated more jobs and improved the standard of living.  The region is home to several mega free trade agreements such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) which is the world’s largest trade deal accounting for nearly one-third of global trade.  The digital cooperation landscape in the Asia-Pacific is also gaining momentum. The regional states have been proactively driving digitalization through multilateral initiatives. For instance, Singapore, New Zealand, and Chile have concluded the Digital Economy Partnership Agreement (DEPA) which aims to increase digital trade and interoperability.  A dialogue was also held between China and ASEAN last year to discuss potential areas for deeper digital cooperation.  ASEAN too is in advanced negotiations on the Digital Economy Framework Agreement (DEFA), which seeks to create an integrated digital environment that collectively benefits the region. In addition, these states are participating in non-binding platforms such as the Asia-Pacific Economic Cooperation (APEC) to explore alternative ways to deepen their economic integration. At the APEC Leaders’ Meeting in Thailand last year, the members endorsed the Bangkok Goals on Bio-Circular-Green Economy (BCG) as part of the grouping’s pursuit of sustainable and inclusive growth as stipulated in the APEC’s Putrajaya Vision 2040.
10. These regional initiatives and collaborations have complemented WTO’s efforts to strengthen the legitimacy of the multilateral rules-based trading system. However, much more still needs to be done.  To strengthen the international trading regime amidst intensifying geopolitical tensions and de-coupling, the Asia-Pacific region must double down on its efforts to increase the resilience of its critical supply chains especially in the pharmaceuticals and semiconductors sectors; enlarge the membership of CPTPP, RCEP, and DEPA; and advance sectoral trade partnerships in digital trade.

Distinguished guests,

11. Under the theme of ‘upholding the spirit of international trade’, this year’s workshop aims to update parliamentarians on pressing global trade issues and to explore avenues to jointly address them. The programme is comprehensive. The topics range from the WTO’s present state of play and prospects of reforms, the digital economy and trade, as well as how small and developing countries can make meaningful contributions at the WTO.
12. When RSIS and the WTO began this annual series in 2009 with the support of the Temasek Foundation, the aim was to increase the capacity of regional legislators to engage in international trade issues. We recognised that you have an important role in facilitating trade.  You are involved in the ratification of international agreements as well as ensuring domestic implementation of these agreements.  You also serve as a bridge between domestic audiences and intergovernmental organisations like the WTO.  It is critical that you have a good understanding of the multilateral rules-based trading system and its role in facilitating the rising prosperity of the region over the past forty years.  We hope that this workshop could assist in this process.

Thank you.