CNA: Could you tell us about your meetings?
Minister: I've had a very busy four days, intensive series of meetings. I've met Secretary of State, Mike Pompeo, I’ve met the National Security Advisor John Bolton, I’ve met seven Senators, another seven Congressman, journalists, businessmen – it's been a packed programme. It's been a good opportunity. Just two weeks ago, I was in Beijing, now in Washington. And so let me cover the issues – first on the bilateral and then on a larger scale.
On the bilateral account, our relations are excellent. The defence relationship is as close as ever. We are negotiating to renew the MOU which was first signed in 1990, which has been the basis for the very close and continuing relationship on the military side. You know that the American Navy and Air Force are significant users of our facilities in Changi and in Paya Lebar. There are still ongoing negotiations, some of which will be announced later on.
On the economic front, America remains our largest investor in Singapore, and continues to invest in Singapore, creating many jobs both within Singapore, as well as in America itself. We reviewed the economic side of it and everything is going very well. We have had a bilateral free trade agreement with America. It's now been 15 years, trade figures continue to grow, I think it’s almost reached US$100 billion, and this is an account which we are very satisfied with.
In addition, we are also looking at new areas of cooperation, exploring issues in cyberspace, cyber security, exchanging of ideas, training of personnel, helping to explore what future standards should be set in order for us to fully tap the opportunities that the new digital revolution will open for all of us. So that's a very busy agenda on the bilateral side.
In all my discussions, this time what stood out is the clear bipartisan anxiety on the part of the Administration, Congressmen, journalists academics – clear anxiety about state of trade relations between the US and China. I've been coming here regularly. This year that tension is palpable. It's too early to say how things will pan out. Clearly there are major issues, both substantive as well as at the tactical level, between the negotiating teams. I think the next few weeks will be critical.
For a place like Singapore, where the United States is our largest investor, and China is our biggest trading partner, obviously, any disturbance or any disruption to global trade will have an out-sized impact on us. So this is something which we're watching anxiously. We are not party to these talks. We're not privy to all the details. Nonetheless, in our meetings in the last two weeks between my Prime Minister and President Xi of China, and in my discussions with Secretary of State and National Security Advisor here.
We have emphasised that our hope is that China and the United States will find a way to both compete and collaborate effectively. We’ve tried to make the argument that globalisation and free trade are not zero sum games. And if they can resolve these current challenges, then we can actually get the world on a far more stable economic platform. And we have to do this because there is an ongoing digital revolution - jobs are being disrupted, middle class wages are being threatened. There is fractious politics all over the world. And we do need to get these fundamentals right, and then focus on the domestic reform which is needed in order to cope with this.
So from the point of view of Singapore, we have to hope for the best. But we also have to prepare for the worst. In the short term, what you're witnessing on the stock market is obviously heightened volatility. That's a short term thing. It will depend very much on the news of the day, and whether the market goes up or goes down. In the medium term, if people and businesses start losing confidence, and investments start being curtailed or held back, then you have to anticipate that there may even be some significant slowing in growth rates, which will be obviously an area of great concern.
The longer term anxiety is that we have two superpowers, two economic superpowers as well. And if they can’t arrive at a modus vivendi. If the global supply chains, which have been interwoven so tightly over the past seven decades. If those are being forced apart, and supply chains are being broken, there will be profound impact on the economy, on politics. In fact, the formula for peace and prosperity which has prevailed for seven decades, will be under risk. So that's something which we will have to watch very closely. My own sense of it is that both on the Chinese side and on the American side, there is insight. They know what's at stake. There will continue to be robust negotiations and discussions. But I'm still hopeful that the leaders will prevail and they will find a suitable way to resolve these challenges. So let's wait and see the next few weeks, particularly in the lead-up to the G20 meeting which would be crucial.
CNA: Can you can you expand on that – that the lead up to the G20 is crucial?
Minister: Well, they've told me that almost certainly there will be a summit between the two presidents. In the meantime, we'll have to see what the negotiating teams come up with. Like I said, we're not privy, and we're not party to those negotiations. That's based on my observations and interactions, both in Beijing and Washington over the past two weeks.
CNA: And in respect, you talked about short, medium long term.
Minister: Yes.
CNA: The US agenda in terms of Chinese reform is very ambitious. There's a lot that goes into the ask from Beijing. And we're seeing some of the kind of tensions around that right now. Is there a sense in which maybe some of the high ambition of the American negotiators in a sense, that the need to get a very good deal from their perspective may end up being the enemy of - the perfect may be the enemy of the good, and that there's, you know, maybe some nuance that needs to go into the minds of the negotiators, and the leadership here about how to achieve as much as they possibly can without actually undermining that?
Minister: Well, I can't speak on behalf of the negotiators on both sides. What I can say from my interactions is there is insight, there is appreciation on both sides. I think there is still true positive will to arrive at a constructive solution. And as I said, we have to hope for the best. And in the case of Singapore, we are in between whether we like it or not - we are at risk, if they don't resolve this. Our role is to play it straight. I say exactly the same thing in Beijing, as we see in Washington. And I think we're in a position where both sides speak to us, trust us. And we're able to discuss things, and candidly. I wanted to make this point in which is particularly relevant to Singaporeans back home. I mentioned just now, we need to hope for the best, we need to also prepare for a period of increased volatility, potential slowing down on growth rates. And in the worst case scenario, a major re-ordering of global supply chains.
Now, preparing for this actually means focusing on our domestic methods. Domestically, the work on restructuring our economy, the work of SkillsFuture, education, training of our people for tomorrow's jobs. All this becomes even more urgent. And we need to double down on this back home. We need to enhance the competitiveness of our enterprises both large and small, to cope with the opportunities and the challenges that both the digital revolution and trade disruption, potential trade disruption will present to us. So the point is, we actually need to work even harder, and with a greater sense of urgency to restructure ourselves domestically, because we know that all these external challenges are rising, and no one can quite predict with absolute certainty whether the current tensions are going to be resolved quickly, or whether we go into a protracted period of uncertainty. So that that's the key point - all the work back home – SkillsFuture, the future economy, all this becomes more crucial.
Similarly, we also need to be looking not just at free trade agreements as we currently know it, but also the arrangements for the digital economy. And this is another area where there is a necessity for global standards, norms, rules to be set. And again, as from the perspective of a small, tiny city state, we hope that these standards will be resolve multilaterally on the basis of discussions of the UN and the other relevant global bodies. Clearly America and China, Russia, the other big players will have an out-sized say, but we want to make this appeal again for multilateralism and the key point again for Singapore is that the faster and the more effectively we reform or domestic sector, the faster we also work on our social safety nets, is basically providing seat belts for our people because we know that we're getting on through what may be a challenging roller coaster. So that confidence that we have fortunately we have the wherewithal, both the regulatory and the fiscal capacity to cope with these potential challenges is very important. But I need our people to be prepared.
CNA: And speaking very specifically, are you worried that 5G is going to go – there's going to be a fork in which two versions of 5G come out?
Minister: Too early to tell, but I would worry about a “splinternet”. The internet was built on the premise that we would all be connected. And we would all be able to communicate, transact. But you will know as well as I do that security, privacy, reliability, and cost effectiveness are all key attributes that actually everyone wants to optimise. Our view still remains that it is better for us to maintain a global common of the internet, rather than to have a “splinternet”. The challenges are not just technical, they are political. And it will also require significant establishment of strategic trust between all the major players. If this is not achieved, then you will end up with bifurcated global supply chains, a bifurcated internet – it will be a very complicated, much less efficient world, a much less hospitable world, especially for a place like Singapore.
We are small, we are efficient, we are connected. We’ve got an excellent diplomatic, political, economic, cyber connections with the whole world. If all these problems and challenges are resolved, we will be perfectly poised to take advantage of it. If they are not resolved, or we go through a prolonged period of uncertainty, we will have to cope with it. And my main point for Singaporeans is be prepared. And we are doing our best to quickly prepare ourselves domestically for a period of international volatility.
ST: Minister, what happens to Singapore and also ASEAN if the economies do get de-coupled?
Minister: It will be a challenge. My point is that it will definitely mean slower growth for all of us. It will also mean in the short term, greater volatility. But if you think about it, the things that we're working on now – education, skills, upgrading the capacity of our enterprises, making our economy more competitive, more efficient – these are still worthwhile investments. In fact, it means we need to double down, and to approach this with an even greater sense of urgency.
ST: Specifically, on Huawei, what do you make of the US move to blacklist it, and will Singapore do the same?
Minister: I don't want to get into those discussions. I mean, I think this is a space which is still evolving very quickly. We are watching this very carefully. We are not at the stage where we have to make any decisions at this point in time.
CNA: North Korea – the Trump Administration is pursuing a strategy whereby that the key element is that in a sense of a level of personal relationship with Kim Jong Un and, and definitely a one-on-one negotiation. But there's been a lot of moves at the moment to suggest that people kind of favour going back to some form of Six Party Talks, and more buy-in from other states that have an interest in this. What's your sense of how you see things right now?
Minister: I think it's hard to say at this point, where the next step will be. Clearly, the US is still emphasising the importance of maintaining the sanctions. And that does have an impact on North Korea. The other element about diplomacy in current days is that President Trump emphasises very much the utility of his personal strong relationship with leaders elsewhere. So I think there’s still no clarity yet on how this will evolve. But right now, we're not short of potential crises in multiple areas. The US is simultaneously dealing with a situation in Venezuela, with Iran, with North Korea, you’ve got this major trade negotiation with China. Everything's happening simultaneously, so that's why my main point is that we have to be prepared for a significant amount of uncertainty and volatility on all fronts.
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