Thursday, June 2, 2016

Lee Hsien Loong’s American Exceptionalism

Singapore’s prime minister says the U.S. might be roiled by politics, but its leadership on trade and security is indispensable.

March 31, 2016

By any global measure, a prime minister of Singapore presides over a minuscule patch of earth and speaks for a tiny fraction of the world’s population. Yet notwithstanding the city-state’s small size—or maybe because of it—its prime ministers often have a keener grasp of American interests than Americans do.

So it’s no surprise that Lee Hsien Loong, Singapore’s current prime minister, would come right to the point in a meeting with The Wall Street Journal editorial board. When asked for his take on the Obama administration’s unratified Trans-Pacific Partnership (TPP) trade deal, which neither the leading Democratic nor Republican candidate for president supports, he answered this way:

“You have an administration which understands America’s international responsibilities and interests, but you have a population which is anxious, tired, and doesn’t want to bear any burden and pay any price. And that’s very difficult for whoever becomes president.”

The TPP is a trade deal with 11 other Pacific nations that would cut tariffs on American goods and services, improve intellectual property rights, and help write the trade and investment rules for an area that is home to about 40% of global economic output.

The agreement notably does not include China. There’s an irony here, because at a moment when trade opponents in the U.S. are hollering that these deals are always stacked against Uncle Sam, China’s leaders fear the opposite is true with TPP. They believe, Mr. Lee says, “that you are trying to create rules which will favor you.”

Every one of America’s important trading partners in Asia, he points out, now has China as its “biggest trading partner.” These nations know they will have a freer and more open trading system if America, not China, is writing the rules. They also know that, for all Donald Trump’s complaints that China is “beating us” on trade, the view from Beijing is hardly triumphant: Its leaders see a Chinese economy that is slowing down and in need of major structural reform.

Nor is China the only one facing challenges. Though most know of Singapore’s storybook rise from Third to First World status, Mr. Lee points out that the obvious gains have all been made. Given its limits on manpower and resources, Singapore’s only avenue for growth is by constantly boosting know-how and productivity.

“I don’t have farmers I can convert into factory workers,” he says.

In short, American “angst and disquiet” over trade is by no means unique these days, though Mr. Lee believes that in the U.S. the worries have been exacerbated by the legacy of Occupy Wall Street. The “psychological impact” of those protests, he says, was to teach “a significant chunk” of the American population to regard the economic status quo as illegitimate.

His take is different. The pain caused by trade and globalization is very real. The failure is not to put it in perspective.

“There are downsides, there are adjustment problems, you have Michigan and Detroit and difficult places like that,” he says. “But overall America has benefited and you are wealthy enough and resilient enough to be able to help those who are buffeted and to take advantage of the opportunities which are out there, rather than say ‘I don’t want the competition, I don’t want cars which are made overseas,’ and ‘I want to pull back and forget about the rest of the world.’ ”

As for the calls to renegotiate the TPP from both Donald Trump and Hillary Clinton, he regards them as a nonstarter. The only effect, he says, would be to undermine American credibility. He cites Japanese Prime Minister Shinzo Abe, who has gone out on a limb—further than other Japanese prime ministers dared—by agreeing to open domestic markets.

“If at the end of it all you let him down,” says Mr. Lee, “which next Japanese prime minister is going to count on you—not just on trade but on security? If you are not prepared to deal when it comes to cars and services and agriculture, can we depend on you when it comes to security and military arrangements?”

Mr. Lee is equally skeptical about Mr. Trump’s vow to make China cry “uncle.” It’s too big. Asked how Chinese President Xi Jinping would respond to a Trumpian ultimatum to do what he demanded on trade or face a 40% tariff, Mr. Lee says Mr. Xi would not go along. Instead, he would conclude that he couldn’t work with America.

And if in the end the TPP were to die as a result of domestic American politics? The likely fallback, says Mr. Lee, is something called the Regional Comprehensive Economic Partnership that includes China but excludes the U.S. To put it another way, an American failure to ratify TPP would bring about the very thing critics of the trade deal complain about: a more empowered China and bad terms for U.S. goods and services.

What makes it all so twisted, says Mr. Lee, is that no one in Asia is rooting for an American retreat. To the contrary, Asian leaders are eager to make America great again, however much they might disagree with Mr. Trump about what this means. If you held a “secret poll,” Mr. Lee says, every nation would vote for broader American engagement no matter what they might say in public.

Broader U.S. engagement would also leave America better placed to handle, say, the tensions raised by China’s habit of setting up outposts on islands in the South China Sea whose sovereignty is contested. Though the islands are themselves insignificant, major sea and air lines of communication pass through this area. Unfortunately, notes Mr. Lee, Washington does not always speak with “one coherent voice”—such as when the National Security Council or the Defense Department give different explanations when the U.S. sends a ship through the area in a freedom of navigation operation.

Not to mention terrorism. Squeezed in as it is between Malaysia and Indonesia—two Muslim-majority nations—Singapore probably feels a particular vulnerability to the advance of radical Islam. It’s getting worse, too, says the prime minister, because Islamic State, or ISIS, has proved far better at recruiting from his part of the world than al Qaeda ever was.

In Singapore, he says, several people have gone to the Middle East, most of them “self-radicalized” via the Internet. More than 100 from Malaysia and about 500 from Indonesia have made their way to the Middle East. In fact, such has been the recruitment success, says Mr. Lee, that ISIS now has a battalion of Southeast Asian fighters called the Katibah Nusantara, or Malay Archipelago Combat Unit. The worry is that ISIS might use these fighters to set up a base in some remote and ungoverned part of Southeast Asia.

In the end, says Mr. Lee, the world simply has found no substitute for American leadership. So in the midst of a U.S. presidential campaign defined by anger and anxiety, he finds himself rooting for a recovery of America’s self-confidence and its sense of American exceptionalism.

“Your role,” says Mr. Lee, “remains indispensable, whether you are prepared to step up to it or whether you decide to chuck it.”

Mr. McGurn writes the Journal’s Main Street column.

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