S’pore combating trade-hostile world by easing trade barriers: Gan Kim Yong

While the US is raising tariffs and potentially igniting a global trade war, Singapore is working to lower duties and trade barriers.

Singapore’s strategy to navigate through this increasingly trade-hostile world will be carried out via its membership of two key bodies – Asean and the Regional Comprehensive Economic Partnership (RCEP), noted Deputy Prime Minister and Trade and Industry Minister Gan Kim Yong.

DPM Gan told CNBC’s inaugural Converge Live conference at Jewel Changi Airport on March 12 that six out of 10 South-east Asian countries – including Singapore – have no import duties on almost all of their taxable products as part of the Asean Trade in Goods Agreement (Atiga). The remaining four members impose no more than 5 per cent on about 99 per cent of such goods.

“But we want to do even better,” said DPM Gan. “We are in the process of upgrading the Atiga to reduce non-tariff barriers, incorporate sustainable trade practices, and address new aspects of trade such as supply chain connectivity.”

The move will boost intra-Asean trade flows, and build stronger supply chains against external shocks and protectionist policies, he noted, adding that Singapore will also focus on the digital and green economies, with initiatives such as investing in low-carbon energy.

Asean is also developing an interconnected power grid that will make it easier to trade low-carbon electricity across borders and enhance the region’s energy resilience.

Talks on Asean’s framework agreement to boost opportunities for investments and growth in the region’s digital economy are ongoing.

The sector is projected to grow from US$300 billion (S$400 billion) to US$1 trillion by 2030, and could double in value to US$2 trillion by 2030 with cooperation, DPM Gan noted.

He said: “We aim to align digital rules and standards, promote interoperability of digital systems such as digital identities and payment systems, and therefore enhance cross-border digital trade.”

The RCEP, where tariffs on around 92 per cent of products have been eliminated, is being enhanced and expanded, DPM Gan said. 

He also welcomed the inaugural CNBC conference, noting that the broadcaster’s choice to host it here reaffirms Singapore’s position as a business hub.

His address was followed by a fireside chat with billionaire investor Ray Dalio and Mr Marc Benioff, chairman and co-founder of US software firm Salesforce, which earlier in the day announced a five-year US$1 billion investment in Singapore and a partnership with Singapore Airlines.

Mr Benioff noted that the apparent global division over artificial intelligence (AI) is not about making the biggest foundational models, although that is where the US has a significant edge.

Rather, the rise of the Chinese model DeepSeek demonstrates China’s strength in making more chips and making them work with applications, he said.

“We’re moving into the digital labour revolution,” he said. “It involves digital agents and agentic age, but it also beholds a robotic age.

“I think the robots that are productive here in Singapore are all Chinese-made. We also see the Chinese complex being able to deliver this next generation of electric and robotic parts at this incredible level of speed. I think that is very impressive.”

Alibaba Group chairman Joe Tsai said in a separate session that the so-called “DeepSeek moment” is not about whether China or the US has better AI.

“It’s really about the power of open source because, once you open-source the model, people can take the model and deploy it on their own infrastructure, whether it’s in a data centre or in your laptop computer.”

The open-source model has made AI accessible to all, he said, noting: “So the AI game is not just left to the five richest companies in the world that can afford to invest, like US$50 billion a year.”

Minister for Digital Development and Information Josephine Teo told the audience that Singapore’s strategy amid the global drawing of lines on AI is to achieve and retain resilience.

“In other words, you want to have choice,” she said.

The choice through diversity could be through the source of supplies, types of technologies and design of the systems. “It’s not always the case that you have the luxury of owning the entire supply chain or even the most critical components,” she said.

Mr Dalio, who founded hedge fund Bridgewater Associates, said a divided world need not disadvantage Singapore: “In history, you can see that there are the major countries, and then there are the neutral countries. And the neutral countries do extremely well during these periods of time.”

Singapore is one such country, he noted. “They get people and capital that go to them. They are able to navigate, in a certain way, make great prosperity and so on.”

A trade war, he said, does not hit the whole world.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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