S’pore looking forward to concluding final pact on trade with Indo-Pacific countries: PM Lawrence Wong
Source: Straits Times
Article Date: 07 Jun 2024
Author: Ovais Subhani
Issue has sensitive areas, but enhancing trade flows can improve lives, he says.
Singapore looks forward to concluding a trade agreement with member states of the Indo-Pacific Economic Framework for Prosperity (IPEF), said Prime Minister Lawrence Wong on June 6.
“This is understandably a difficult issue with sensitive areas,” he said in his keynote speech at the IPEF Clean Economy Investor Forum, a one-day event held at the Sands Expo and Convention Centre at Marina Bay Sands.
“But trade is the lifeblood of countries in this region, and we look forward to reaching a substantive agreement that will enhance trade flows amongst IPEF countries, and improve the lives of our people,” said PM Wong, who is also Singapore’s Finance Minister.
Launched in 2022, the IPEF comprises 14 members – Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the United States and Vietnam. They represent 40 per cent of global gross domestic product and 28 per cent of global goods and services trade.
The IPEF aims to promote cooperation, prosperity and peace through various initiatives, including sustainability, economic growth and competitiveness, among member states.
The framework is designed to back the initiatives by agreements on four pillars of IPEF – trade, supply chains, the clean economy and the fair economy.
PM Wong said in his speech in the morning that good progress has been made on the supply chain agreement – which entered into force in February 2024 – while negotiations on the clean economy and fair economy agreements were concluded in 2023, and that the pacts will be signed on June 6.
Later in the day, Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong and other IPEF ministers signed the IPEF Clean Economy Agreement, the Fair Economy Agreement, as well as the overarching agreement on the IPEF at a ministerial meeting.
IPEF members will now take steps for the ratification, acceptance, or approval of these agreements.
PM Wong said that Singapore has long been an advocate for the US to actively engage the region, especially South-east Asia.
“Asean countries too are keen to deepen ties with the US, for they recognise that America continues to play an indispensable role, whether in maintaining the strategic environment, or supporting economic growth.”
Speaking specifically on the clean economy initiative, PM Wong said there are three areas IPEF can focus on to accelerate the net-zero transition – clean energy infrastructure, scaling up new technologies and financing.
He announced that Vietnam, Singapore and the US will form a working group on subsea cable development under the IPEF umbrella to lay the foundation for regionwide clean energy infrastructure that can help countries endowed with renewable energy sources to export the surplus to energy-deficient neighbours such as Singapore.
He said Thailand and Vietnam have high potential for solar and onshore wind energy; Indonesia and the Philippines can access offshore wind and geothermal. Outside of the IPEF, the Asean countries of Cambodia and Laos can tap hydropower.
“The working group will facilitate knowledge sharing and consensus building on subsea cable issues in the region, as well as look into ways to encourage investments into these capital-intensive assets,” he said, and welcomed other IPEF countries to join in the effort.
On the area of scaling up new technologies, PM Wong said the IPEF has been making some progress.
He said: “Countries are cooperating and sharing expertise on areas such as green hydrogen, and are exploring cooperation in other areas like sustainable aviation fuels.
“IPEF also launched two new financing initiatives – the Climate Fund and the Catalytic Capital Fund – to invest in areas that will help to transit to a clean economy.”
He said there is scope to do more, especially in the area of carbon capture and storage (CCS) –the process of trapping industrial carbon emissions which are then transported to a long-term storage location.
He said in January 2024, Indonesia became the first South-east Asian country to develop CCS-related legislation. Following this, Singapore signed a letter of intent with Indonesia to collaborate on CCS, he added.
“With clearer legal frameworks and legislation, we hope to catalyse the deployment of cross-border CCS projects in the Indo-Pacific, and accelerate our transition to net zero.”
In the area of finance, PM Wong said Singapore is putting together a blended finance platform called Financing Asia’s Transition Partnership (Fast-P).
US Commerce Secretary Gina Raimondo congratulated IPEF members on transforming an idea in just two years into three ground-breaking, first-of-their-kind agreements that are strengthening supply chains, supporting clean economy transitions and enhancing transparent and predictable business environments.
She said IPEF member countries have brought clean economy projects worth a total of US$23 billion (S$31 billion) for consideration by over 160 investors attending the forum.
“It’s pretty clear that this event isn’t here for us only to talk. We are taking action,” she said.
Ms Raimondo said the investor forum is a key feature of IPEF, designed to mobilise investments for the climate infrastructure and technology that the region urgently needs – such as the Asean Power Grid.
In a separate press call, Ms Raimondo said the investor forum in Singapore succeeded in mobilising capital from big investors. Global Infrastructure Partners, KKR, and the Indo-Pacific Partnership for Prosperity will form a new coalition to catalyse infrastructure investment across IPEF emerging economies.
She said coalition members, which also include Allied Climate Partners, BlackRock, the Rockefeller Foundation, and Singapore’s Temasek and sovereign wealth fund GIC, have over US$25 billion in capital that can be deployed in Indo-Pacific emerging market infrastructure investments in the coming years.
She did not make any comments on the trade agreement, negotiations on which were suspended in November 2023 after some US politicians demanded strong environmental and labour protections be included in the deal.
Source: Straits Times © SPH Media Limited. Permission required for reproduction.
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