MFA Press Release: Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Interviews with BBC, 20 April 2018

MFA Press Release: Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Interviews with BBC, 20 April 2018

20 Apr 2018

Interview with James Webb, Presenter, BBC Radio 4 – The Today Programme

BBC:The 200th anniversary of the founding of Singapore is next year. In the market there is going to be a new and substantive partnership betweenSingapore and the UK – that is what we’re told. What might that mean though, in a post-Brexit world? In particular of course, what is going to happen to trade? A Singapore-EU trade agreement is due to come into force next year, will we be part of that? The Minister for Foreign Affairs in the Government of Singapore is Dr Vivian Balakrishnan and he is here in the studio. Good morning to you.

Minister: Good morning.

BBC: What is the status first of all of that trade deal with the EU because it took a long time to arrange? Is it now definitely coming into action?

Minister: Well, there’s still one more step. It needs to be ratified. We hope that will be done sometime later this year and then we can bring it into force next year.

BBC: And if it comes into force next year, that’s almost a ticklish time isn’t it? Because Britain, in theory at least – probably in practice – is going to be going out of the European Union and involved then in a transition arrangement, set of transition agreements with the EU. Is it going to be part of the deal?

Minister: No, in fact that’s all the more reason why it’s important to get it done this year. If we can get it ratified and into force next year, then when Britain leaves or invokes the Brexit clause, we will make what we call continuity arrangements, which will allow us to port the provisions of the EU-Singapore Free Trade Agreement to Britain. 

BBC: And are you happy to do that?

Minister: Yes. We would be happy to do that.

BBC: Because the argument has been in the past that those porting arrangements wouldn’t always be so easy. For instance, with South Korea, where actually it’s a different set of arrangements and there might be different things that you want to be included in those arrangements. You’re saying not so?

Minister: Well, Britain and Singapore have a special relationship. We’re both free traders, we believe in integration, we believe in economic interdependence and we are keen to help Britain get across this transition with minimal disruption. In due time we can subsequently look to upgrade, modify, improve the agreement. But it is very important that in the transition period, not to have a hard stop.

BBC: So all the benefits of the free trade arrangement that you will have between Singapore and the EU will continue to be felt by Britain after Britain has left the European Union?

Minister: That’s our hope. Now, obviously it depends on the EU making that offer to allow for these continuity arrangements. It depends on the UK also agreeing to this but I am indicating that Singapore is open for business and we want to maintain –

BBC: Just fill out though, why it is that the EU is involved in that decision? 

Minister: Well, Britain is still part of the EU.

BBC: No, but once it has left?

Minister: This offer for continuity, at this point in time needs to be made by the EU, to us. So there is still something which the United Kingdom needs to settle with the EU, in order for this continuity arrangement to be made. But what we are signalling, unequivocally, is that we want our trade relations with the United Kingdom to continue, to continue without disruption, and in fact, to build upon it.

BBC: One of the big things that people talk about and the difficulties of these arrangements, and it’s been mentioned with South Korea but other countries as well, is this highly complex area known as rules of origin where something that is made in a country, but comes into that country from other places, can or cannot be counted as an export from that country. Is that an issue in this?

Minister: Not really for us. Singapore has got about 21 free trade arrangements and another three subject to ratification, and we are still negotiating another half a dozen or more. So these issues of rules of origin – I mean, there is a whole body of negotiations which we can rely on.

BBC: But say for instance –

Minister: So I don’t expect this to be an issue.

BBC: A high-quality car, an expensive car, exported at the moment from Britain to Singapore. Made right around Europe, bits of it coming from all sorts of countries. When Britain has left the European Union, assuming it does, you’re saying there won’t be an issue about the fact of that car being built in other places?

Minister: During the continuity period, we will follow the same rules of origin that are currently agreed upon in the EU-Singapore Free Trade Arrangement. So I don’t view that as a problem.

BBC: Turn to a wider one.

Minister: Yes.

BBC: People often talk about the choices that Britain has to make now. And one of the choices is – too boldly made probably – but one of the choices is between becoming a kind of Singapore and becoming a kind of Europe. You laugh, why

Minister: No, I don’t think the analogy is in any way appropriate. Singapore is a tiny city-state, a small low-lying island in the heart of Southeast Asia. The United Kingdom is on a completely different scale, and you are located in a completely different part of the world with different challenges and opportunities. I think the question of Brexit is something for the UK voters, and the UK voters have decided.

BBC: But is it something about an attitude of mind? Because there is now a division in this country between those who say we should become a much freer trading country and a much more open country, and a country perhaps with fewer safety nets etc. And that is how people see Singapore, whether or not that is actually the case. And those who say we are sort of going down the European route, really – we’re doing the complete opposite.

Minister: Well, if you don’t mind, since this is the Commonwealth meeting, it’s worth reflecting that the Commonwealth exists because the industrial revolution began in England three centuries ago. And if you think about the Commonwealth, and if you recall this old system of imperial preferences, the Commonwealth was a trading bloc. The key ingredient for the future is mastering the technological revolution that’s occurring now. And then, maintaining an open, inclusive, rules-based approach to trade, movement of people, and ideas. That’s how you create future jobs. So, you’re absolutely right – it is about a frame of mind. So, I’m not so much caught up with the details of Brexit, but the mind-set and the attitude. To understand that there is another new technological revolution occurring now. And the most important thing is to make sure our people have the skills and the qualifications for tomorrow’s jobs, not arguing about yesterday’s technology and yesterday’s instruments. Now, in the same way, from Singapore - you need to understand, we have a very unique perspective. We are the fourth largest financial centre, the second busiest port in the world. For us, our trading volume is about three times our GDP. No one else in the world has that kind of ratio. For us, when we say we believe in free trade, it’s not a negotiating point, it’s life-blood! 

BBC: You’ve walked the walk. Dr Vivian Balakrishnan, thank you very much for coming in. 

Minister: Thank you.

Interview with James Coomarasamy, Presenter, BBC World Service - Newshour

BBC: World trade, is obviously the important, and the key question a lot of people are talking about at the moment and as we’re in London, we’re in the UK, and the context of this Commonwealth Heads of Government Meeting is, we’re on the cusp of Britain leaving the European Union. Do you think that Singapore potentially offers a model for the UK after it leaves the European Union? In terms of trade, in terms of how it deals with other countries economically?

Minister: Well, the first point is I don’t think you can compare Singapore with the UK. Singapore is a tiny island, a city state in the heart of Southeast Asia. The UK is on a much different scale, and you’re in a completely different part of the globe with different set of challenges and risks. So I always feel very uncomfortable with that analogy. But having said that, the question of Brexit is something for the voters of the United Kingdom to make. The details are for the negotiators, the government of the day. The more important issue really, is mindset. I believe that both the United Kingdom and Singapore depend on free trade. I believe we have benefited, certainly in the case of Singapore over the last 52 years of our existence as an independent state. On the fact that there was global consensus, free trade, interdependence, and in particular, rules of free trade under a multilateral institute. In this case, obviously the WTO. Having such rules, uniform, universally applied rules, provide space, especially for tiny states like Singapore, to make our way to find a role in the global system. Because history is very unkind to small states. Britain is not in that position. But I think we both share that commitment. What has been very clear in all my meetings here in the last few days is this belief is that we need free trade, that we need to support a multilateral, rules-based regime and regardless of the specific national circumstances, we have got to make this commitment. Now, this is not something which you can take for granted. Right now, if you look at the political zeitgeist, there are deep questions about trade, about how well its benefits are distributed and it’s almost an existential angst within many societies.

BBC: Well, I was going to ask you about the zeitgeist because you talk about small nations like Singapore with a commitment to free trade. Let’s move away from Britain. Let’s move to a very big nation, the United States, which seems to be questioning its commitment under this administration to free trade. Pulling out of the TPP, obviously has an impact on Singapore. How concerned are you?

Minister: We are very concerned. Singapore is the only country in the world whose trade volume is three times that of our GDP. For us this is not a negotiating point, it’s not a debating point, it’s our lifeblood. And as I’ve said, we believe in a multilateral approach because uniform, universally applied rules, that kind of system provides opportunities for even small states to survive and trade. It allows for systems to deal with both the risk, the political risk and the economic opportunities. It allows for trade-offs to be made. It allows for win-win outcomes. So, because of that, Singapore, by definition, has to believe in free trade, has to believe in multilateral institutions, and has to believe in multilaterally set rules applied universally.

Now, having said that, I referred to the political zeitgeist. This same zeitgeist is affecting America, it’s affecting United Kingdom, and it’s affecting many parts of the world. The challenge for politicians is not to overstate the case for free trade, but to make sure that our citizens have the confidence, that in fact the problem is not trade. The real problem, the real issue, is that there is a new technological revolution - the digital revolution. It’s completely up-ending the way we live, work, play, jobs, education, the way we communicate, the way we socialise and the way we mobilise. If our citizens do not feel confident that the governments will provide the training, the education, the skills, the investments in infrastructure needed to cope with this new revolution, then, citizens quite rightly say, “Hold on, something’s wrong with the world.” My point is that, don’t blame free trade. Understand the real issue is technology. We need to master the technology. And one of the keys to mastery of this new technology is openness, inclusion, being able to absorb ideas, to apply it in your local context and to keep trade in goods and services, and ideas going. So it’s a harder sell you see.

So the point I am making is, the analogy I gave earlier this week was, if you think about it, the Commonwealth exists because the last industrial revolution began in the United Kingdom three centuries ago. The Commonwealth bloc, actually was a trading bloc. There was a system called the imperial preferences which existed until the end of the Second World War and then when Britain joined the EU and trade patterns changed, that fell away. But now, even as the UK contemplates Brexit and as we have a very momentous Commonwealth Summit, where you have fifty heads of government present in one place. I think there is a renewed sense that we need to interconnect, we need to trade and we need to commit to a multilateral rules based system and here is where. 

BBC: Can I just on that point…when it comes to…you’re worried about the direction of travel in the United States when it comes to free trade, you’re worried about where President Trump is taking the United States?

Minister: I am not worried specifically. It’s not just President Trump. It’s not just United States. This is a legitimate anxiety on the part of populations all over the world. That something is going on and I am concerned about my job, I’m concerned about having a good wage, I’m concerned about the future for my children and I’m saying that free trade has been wrongly blamed for this anxiety. And we need to explain to our people what really is going on.

BBC: Can I turn to another cause of anxiety in your region, North Korea. Perhaps less of a cause of anxiety than it was a few weeks ago. The meeting between President Trump and President Kim. We do not know yet where it’s going to happen, but one of the venues for it has been suggested is Singapore. Can you enlighten us

Minister: I have no information to add on that point. We welcome the fact that they hopefully will meet, hopefully will have a good frank discussion.

BBC: Would Singapore be open to hosting the meeting?

Minister: No, I think we are jumping the gun. I have not had any invitations to offer ourselves as a host. But as I said, we welcome the meeting, we welcome frank dialogue between two key protagonists. A de-nuclearised Korean peninsula would be a very positive step for all of us in Asia and in the world.

BBC: And there are very positive noises in particular coming out of Seoul that essentially North Korea is open to complete de-nuclearisation. Is there a danger of being too optimistic about these talks?

Minister: This is a seventy year old problem, and I’ve learnt in this field not to be overly optimistic. But I hope that the key decision makers, the key stakeholders understand what is at stake and make the right rational decisions which will be good for them and good for the rest of us. 

BBC: You talked about trade and how Singapore has been very open to trade. Singapore has traded with North Korea and has had some criticism for the amount of trade because there’s been a sense that maybe it has facilitated the regime continuing. Do you accept those criticisms?

Minister: No. Not at all. Singapore fully complies with all the resolutions passed by the United Nations Security Council. You need to understand again for Singapore, precisely because we are a small state, compliance with international law, especially expressed through the United Nations Security Council, is sacrosanct for us. So we have got to comply with that and we do.

BBC: Let me just ask you about China and another very important issue for your region, what has happened in the South China Sea. Is Singapore comfortable with what China is doing? Building military bases on atolls in the South China Sea. Is it good for security? Is it good for the region?

Minister: Let me again express things from a Singaporean perspective. First point is that we are not a claimant state. There are four claimant states in Southeast Asia. It’s Malaysia, Brunei, Philippines and Vietnam. So, Singapore is not one of them. Now, having said that, because our trade is three and a half times our GDP and so much of that flows through the South China Sea, peace, stability and even absence of tension on the South China Sea makes a big difference to us. So we do have interests in peaceful resolution of these disputes. My third point is that disputes involving sovereignty can often be intractable. The more important point is to achieve peaceful resolution of disputes, to encourage cooperation and to de-escalate tensions. Now on this score, Singapore, because we act currently as the coordinator of relations between ASEAN and China. And I’m glad to report that certainly over the last two years, things have been moving in a positive direction.

BBC: A quiet direction. ASEAN didn’t mention it after its last meeting. It didn’t mention the issue.

Minister: No, we have. Right now we are negotiating a Code of Conduct in the South China Sea.

BBC: So it’s quiet diplomacy that you think will work?

Minister: Of course. Look, we’re Asians. I do not believe in megaphone diplomacy. We believe in quiet, sincere, honest and frank, but couched appropriately. That’s the style of diplomacy to conduct in Asia. And I’m glad to report that the South China Sea is much calmer now than it was, say, a few years ago. And even between the claimant states and China, they’re looking at ways to enhance cooperation, joint projects. I think this is the way to proceed. Because there’s some issues which are intractable, and just bringing them to a head generates more heat than light. So I’m comfortable with where we are right now.

BBC: You’re comfortable with China’s –

Minister: – relations with the rest of ASEAN and Southeast Asia. Now, there’s another dimension. It comes back to trade. For all of us now, China is our largest trading partner. In fact, for Singapore, in a curious way, we are the largest foreign investor in China. We all have too much at stake, too much to lose, if things go awry. It’s in no one’s interest for things to go wrong. Now, having said that, Singapore also depends upon a rules-based multilateral system. Again, because we’re a small state. And the whole purpose there is so that we can overcome difficulties and disagreements peacefully, continue to invest in infrastructure. And in particular in Southeast Asia right now, there’s great demand for investments and infrastructure, connectivity, ports, airports, digital infrastructure. Southeast Asia, today our combined GDP is US$2.5 trillion. But 60% of our population is below the age of 35. There’s a demographic dividend not yet harvested. If we have peace, we have continued investment, we have continued economic integration – and we’re doing so through our network of free trade agreements, both on a country basis as well as on a regional basis – if we do all this, in the next two decades, we hope to achieve a combined GDP of about US$10 trillion. At that point, ASEAN is the fourth or fifth largest economy in the world.

BBC: Just a final thought. Do you feel, as the top diplomat in Singapore, in a sense now, your moment or the moment for Singapore, has come with, as you say, threats to the global trading norms? Perhaps coming not exclusively, but, from the White House, a more militarised China, a more confident China building in the South China Sea. And Singapore in this unique position, as you say, is the biggest investor in China, but at the same time very closely linked to the Western trading organisations. Do you feel a sense of responsibility, a sense of moment?

Minister: Singapore always feels a sense of vulnerability. It is our karma to always look for threats, look for opportunities which we can maximise. But as I said earlier, the most important thing is the mindset. To understand what’s really going on, to explain it to our people. And in fact our political focus domestically is on restructuring our economy. Many people say, look, you guys are reasonably successful, still good economic growth – why are you so focused on restructuring the economy? Well, we are focused on it because we know that there is a new revolution. If you don’t do that, and if you don’t carry your people, and convince your people, and give your people confidence that the seat belts are on as we get onto this rollercoaster, then you end up making wrong decisions. So it’s important. There’s a revolution, prepare for it, remain open, remain inclusive, continue to believe in a rules-based multilateral world order. If we can do all that, then what I’m saying is in fact we are at the dawn of a new set of wonderful opportunities. And we hope the UK will be part of that. The UK has what I call the Commonwealth advantage – the legacy of English language, rule of law, democracy, familiarity, diversity. If the UK plays its cards right, it’ll find that it’ll have an advantage in such a world. And that’s why we look forward to the United Kingdom playing – we hope – a bigger role, and in fact simply taking advantage of the headstart which it had, but perhaps was too distracted in earlier years.

BBC: Foreign Minister, I’ll let you unstrap yourself from the BBC seat. Thank you so much indeed.

Minister: Thank you. It was wonderful meeting you. 

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