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We have to cope with this adjustment, as we cannot expect to have a first world economy with third world costs.
To grow sustainably, we need to improve productivity by growing our topline and managing costs.
Many of our companies understand this, and are already transforming to respond to this new reality.
We will support our companies by continuing to expand our economic space overseas.
Our companies can capitalise on growth opportunities overseas particularly in our neighbourhood,
the ASEAN region, by leveraging on our network of Free Trade Agreements (FTAs).
Mr Gerald Giam is concerned that Singapore's interests may not be adequately protected
as we negotiate with other countries participating in the Trans-Pacific Partnership (TPP).
Let me assure Mr Giam that Singapore and Singaporeans are at the heart of our FTA negotiations.
We proactively consult other Government agencies as well as relevant stakeholders, to ensure
that Singaporeans benefit from our FTAs with other countries.
Our approach to the TPP is no different. More specifically, Mr Gerald Giam also asked
about the tradeoff between strong Intellectual Property (IP) regime versus healthcare cost through generic drugs.
A strong IP regime is a critical enabler for Research and Development (R&D).
In fact, our strong IP regime is an important factor why we have succeeded in building up
a significant biomedical sciences sector over the last 15 years.
At the same time, keeping drugs affordable for Singaporeans is a very important consideration.
Therefore, MTI will work with MOH and other
government agencies to make sure we are able to strike the right balance in our TPP negotiations.
Ms Lina Chiam alluded to a "spaghetti bowl" problem created by overlapping FTAs.
Our approach to FTAs has been explained several times. We are committed to multilateral trading
systems like the World Trade Organisation (WTO).
But at the same time, we see regional and bilateral FTAs as being important, because they complement the multilateral approach.
They allow like-minded and progressive trade partners to move ahead and liberalise earlier.
Ms Chiam refers to the EU-ASEAN bloc to bloc FTA negotiations.
As she mentioned in her speech, this negotiation
was initiated in 2007 and after 2 to 3 years, did not get anywhere.
And that is the reason why the EU decided to change tack and revert to a EU-Singapore FTA.
And we successfully concluded that in December 2012. The EU is now in the process of negotiating with Vietnam and Malaysia.
This approach of EU negotiating with individual
ASEAN countries and later putting it together into a regional agreement is very similar
to the process that Japan undertook, in negotiating with ASEAN.
So it is not unusual for regional blocs like the EU to do so on a country to country basis,
and then put it together later on in a regional bloc.
But the key point I want to make is that in our FTAs, we try to open up market access for our companies.
And overall, Singapore benefits from the network of FTAs that we have negotiated.
We have indeed capitalised on all these FTA agreements
to strengthen our position as a key trading, investment and services hub.
Our companies are beginning to appreciate this, and they are working closely with IE Singapore
as well as our trade associations and chambers to fully utilise our extensive FTA network for preferential market access.
Mdm Chair, in addition to strengthening our
trade linkages, we will continue to restructure our economy and help companies transform the way they operate.
DPM Tharman outlined how we can keep our economy vibrant and create good jobs for Singaporeans.