SAN FRANCISCO – Trade rules need to keep pace with new digital opportunities and the World Trade Organisation’s (WTO) derailed dispute settlement mechanism needs to be revived, Prime Minister Lee Hsien Loong said on the closing day of the Asia-Pacific Economic Cooperation (Apec) summit on Nov 17.
He was speaking at a session on “interconnectedness and building inclusive and resilient economies” at the Apec Economic Leaders’ Retreat.
“As a small and open economy, to Singapore, the rules-based multilateral system is our best hope for a stable international environment,” PM Lee said.
“That’s why Singapore supports IMF and WTO reforms,” he said, calling international organisations, such as the International Monetary Fund (IMF) and the WTO, the “indispensable guarantors” of common growth.
In February 2024, ministers from 164 WTO member nations will meet in Abu Dhabi to consider restoring the body’s ability to settle trade disputes.
The WTO’s dispute settlement system – meant to prevent recourse to tariffs and retaliation outside agreed international norms – has been stymied since the Trump administration decided to block the appointment of new judges to the Appellate Body, alleging judicial overreach.
The term of the last sitting Appellate Body member expired on Nov 30, 2020.
“The WTO Appellate Body remains paralysed,” PM Lee said, adding that a well-functioning dispute settlement mechanism, that is binding and enforceable, needs to be resurrected.
Another key decision also hangs in balance in the February meeting – extending the current practice of not imposing customs duties on “electronic transmissions” or e-commerce, which expires in March 2024.
PM Lee called for permanent extension of the moratorium to provide certainty for businesses.
Trade rules also need to address new opportunities, he said.
With more goods and services being sold online, it is estimated that the digital economy ranges from 4.5 per cent to 15.5 per cent of global gross domestic product.
Over the next decade, around 70 per cent of new value created in the economy will be through digitally enabled platforms.
But issues of cross-border data flows, privacy and data localisation are the subject of debate between nations.
The baseline rules for the digital economy can be modelled on the existing WTO initiative on e-commerce and the Apec framework, PM Lee said.
Adopted in 2017, the Apec Internet and Digital Economy Roadmap provides guidance to help member economies promote growth, with a focus on 11 areas such as digital infrastructure, universal broadband, regulatory coherence and promotion of interoperability.
Calls for IMF reforms have also grown louder over the last few years, with demands that the 79-year-old organisation be updated to accommodate the rise of China and include new governance and accountability structures, as well as the capacity to address challenges like climate change, inequality and discrimination.
During his address at the customary Apec leaders’ retreat, PM Lee singled out food security as another priority area for action.
“It is important that all economies continue to enjoy unimpeded access to food and agricultural commodities, especially during crises,” he said.
“Geopolitical and economic realities are putting immense pressure on multilateralism, but the benefits of free and open trade, and of connected economies and markets, remain valid.”
