The Future of Asia 2012

Singapore's Lee Urges Japan To Reform For TPP

Thursday, May 23, 2013

TOKYO (Nikkei)--Japan's "bold" entry into the Trans-Pacific Partnership negotiations must be accompanied by structural reforms to the economy if the country is to maximize the benefits of the agreement, Singapore's Prime Minister Lee Hsien Loong said Thursday in Tokyo. Regional Stability will be realized through economic integration and balanced diplomacy with China, he argued.

"The TPP is a step toward the ideal of free trade in the Asia-Pacific," Lee said at the 19th International Conference on The Future of Asia. "Japan's membership in the TPP is a big plus because of the sheer importance of the Japanese economy."

The government of Prime Minister Shinzo Abe, Lee said, has an opportunity to bring Japan to the center stage in international affairs if it can revive the nation's economy through the set of policies dubbed Abenomics.

"Japan will derive the greatest benefit from the TPP if it also makes structural changes to its own economy," Lee said. "Implementing domestic reforms will be a difficult task, but I am glad that the Abe administration is committed to this."

The Regional Comprehensive Economic Partnership negotiations between Japan, China, South Korea, Australia, New Zealand, India and the members of the Association of Southeast Asian Nations would be key to ensuring future stability for the region, Lee said.

Regional stability in Asia will depend on economic integration, the prime minister said. The RCEP negotiations offer an opportunity for Asia to further integrate and increase stability.

"The RCEP will not only create new opportunities for the Japanese economy, but also contribute to an open and inclusive regional order," Lee said.

The changing world order accompanying China's growing influence in the Pacific region, where the U.S. maintains a military presence, is being managed carefully and is unlikely to lead to regional instability, the Singaporean leader said.

Lee said China's military buildup is to be expected. "China wants to build up its armed forces and take its rightful place in an evolving world order," he said. "This is natural for any growing power and should not surprise anyone."

He said, however, that countries are watching China closely, and the government in Beijing needs to exercise restraint to reassure the international community.

"America and China need to institutionalize exchanges to build strategic trust, to promote transparency and to prevent misunderstandings, and develop clear rules of engagement to avoid incidents," Lee said. "A major shift in the global balance is taking place, and I am cautiously optimistic that it will be managed by the main players wisely and prudently."

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.