Singapore Wants U.S. to Focus on Trade Rather Than China Rivalry

(Bloomberg) -- Singapore has urged the Biden administration to focus on trade as the U.S. formulates its long-awaited Asia strategy to counter what it sees as the growing economic and military threat from China.

Minister for Foreign Affairs Vivian Balakrishnan said the distrust between the Washington and Beijing has intensified over the past few years to the point that the policies of President Joe Biden toward China “basically remain unchanged” from his predecessor and sanctions have become even tougher.

The U.S. is negotiating a new economic framework with Asian countries after ruling out joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership due to opposition back home. There's still little detail on the scope and membership of this new pact.

“Let's see and let's encourage them, but as I said, the key point I keep making, and in fact the Prime Minister has made to multiple presidents, in Asia, trade is strategy” Balakrishnan told parliament. “So let's watch how progress is made on this front.”

Singapore, a key U.S. ally in Asia, has become increasingly vocal about the Biden administration and its economic engagement with the region. There are concerns that the U.S. will be distracted with the Russian-Ukraine war although Washington has agreed to host a summit with Southeast Asian leaders later this month, where China will be a key topic.

President Joe Biden's earlier refusal to join the 11-nation CPTPP, however, has left an opening for Beijing, which along with the U.K. and Taiwan is vying to join it. Singapore is the 2022 chair of the CPTPP and its deputy prime minister has said the U.S. economic framework needs to be an “equally substantive alternative” to the 11-country trade pact that Donald Trump exited five years ago.

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Balakrishnan said he has told American officials on numerous occasions that it was a mistake for the U.S. to pull out of the pact. “It is still the most ambitious level free trade agreement -- safeguards not only for trade, for labor, for the environment, intellectual property and the rest of it,” he said.

The U.S. Chamber of Commerce last week warned “the region is moving ahead” without America in its recommendations for the so-called Indo-Pacific Economic Framework, citing other major trade and digital economic pacts of which the U.S. are not a part of.

“Exiting the TPP and dismissing the opportunity to strengthen and join its successor agreement, the CPTPP, have created a vacuum of U.S. economic and strategic leadership in the Indo-Pacific,” it said.

American political parties, businesses and society have generally viewed China as a direct threat to U.S. interests and this has been “compounded by the fact that the U.S. has never in its history faced a peer competitor on such a scale,” Balakrishnan said. For Beijing, there's a growing perception that the U.S. is a power in decline, “reacting defensively and aggressively to China's inevitable growth and progress,” he added.

Singapore will not get caught up in these geopolitical games of big powers, Balakrishnan said. “We do not take sides but we do take a stand to uphold existential principles.”