DPM Heng Swee Keat at the US-ASEAN Business Council 40th Anniversary Gala Dinner

Mr Jeffrey Perlman, Board Chairman, US-ASEAN Business Council and President, Warburg Pincus,
Ambassador Ted Osius President and Chief Executive Officer, US-ASEAN Business Council,
Ambassador Brian McFeeters, Senior Vice President and Regional Managing Director, US-ASEAN Business Council,
Excellencies,
Ladies and gentlemen,

Good evening! I am delighted to join all of you to celebrate the 40th anniversary of the US-ASEAN Business Council.

To those of you who have travelled a great distance to be here today, I extend a warm welcome to Singapore.

I hope you spend a few more days, in Singapore and around ASEAN, to make your trip even more productive and enjoyable!

The US-ASEAN Business Council was set up in 1984, before merging with the US-ASEAN Center for Technology Exchange some years later.

It was a time of great political tension and economic uncertainty globally.

President Reagan had labelled the Soviet Union an ‘evil empire’ and predicted its demise.

On the economic front, following a global recession and rising inflation in the early 1980s, there was momentum in the US for protectionist measures to address trade imbalances, job losses and budget deficits.

This was a major concern for many countries in Asia, and across the developing world, which were steadily opening their doors to trade and investment to build a better future for their peoples.

In 1985, Singapore’s founding Prime Minister Lee Kuan Yew was honoured to be invited to address a Joint Session of the US Congress.

Mr Lee noted how it was the US and Europe, in decades prior, that had forced a reluctant China and a hermit-like Japan to open up their countries to trade with the West.
 
And now it was the Chinese and Japanese instead who had to come knocking at America’s door to get in to trade. He noted that it was a “bitter-sweet irony of role reversal”. 

Mr Lee was concerned with the US losing its will to maintain free trade, noting that there were over 300 bills in Congress at the time relating to the protection of the US market. 

He asked, “Does America wish to abandon the contest between democracy and the free market on the one hand versus Communism and the controlled economy on the other, when she has nearly won this contest for the hearts and minds of the Third World?” 

Mr Lee made a powerful case for how free trade and investment enabled peoples around the world, especially in developing countries, to fulfil their aspirations for a better life without going to war. 

He urged the US to continue to maintain its position as the “anchor economy of the free market economies of the world”, in an open, peaceful and rules-based international order.

Mr Lee was prescient.

Six years later, in 1991, the Soviet Union collapsed. A decade later, in 2001, China entered the World Trade Organization or WTO.
 
In our region, ASEAN was created in August 1967 with an initial five Member States, motivated by a desire to contain communism.

I recall, as a child, the fear in Singapore of countries falling to Communism like dominoes, from Vietnam and other countries in Indo-China, all the way down to Malaysia and Singapore.
 
Thankfully, strong support from the US, the collapse of the Soviet Union, and China’s reforms and opening up changed the course of history. 

ASEAN pivoted to become a strong advocate for regional trade and security.
 
By 1999, ASEAN had 10 Member States including Vietnam, Cambodia, Laos and Myanmar.

I have spent some time sketching these key events around the time that the US-ASEAN Business Council was first formed, for two reasons.

The first is to highlight the significance of free trade and investment to all countries, big and small, in meeting the aspirations of their peoples for a better life.

The second is to point out the significance of US advocacy for free trade, and the valuable contributions of the US-ASEAN Business Council in this regard. 

In particular, the Business Council has achieved much in strengthening business, trade and investment ties between the US and the 10 ASEAN countries.

By supporting your member companies through advocacy, thought leadership, research and intelligence, and by building key business relationships, you have expanded economic linkages between our markets.

In the 40 years that the Council has been engaging the region, trade between the US and ASEAN has increased nearly seven-fold.

Today, the US is ASEAN’s second-largest trading partner. And ASEAN is the fourth largest destination for goods exported from the US. 

This is very significant, because the top two destinations are Canada and Mexico, which have been closely integrated first through NAFTA and now through the US-Mexico-Canada Agreement. And the third is China. 

The US is also ASEAN’s largest source of foreign direct investment.

In fact, as of 2022, ASEAN is the top destination for US investment into the Indo-Pacific – more than China, India, Japan, and South Korea combined. Again, this is most significant.

I must take this opportunity to congratulate the staff of the US-ASEAN Business Council – your website has an insightful section on “Why ASEAN Matters” which I encourage everyone to read.

On a bilateral basis, Ted earlier mentioned that this year marks the 20th anniversary of the US-Singapore Free Trade Agreement.

For us in Singapore, and indeed for me personally, I recall how the Business Council served as the Secretariat for the Free Trade Agreement’s Business Coalition.

You mobilised support for the agreement among US businesses and helped secure its approval by the US Congress.

So I am happy to see familiar faces joining us today, including Ernie Bower who was Council President then. Congratulations Ernie on receiving the Founder’s Award this evening!

I’m also very happy to see Ambassador Chan Heng Chee here tonight. Ambassador Chan was Singapore’s Ambassador to the US and spent a huge amount of effort to get support for the US-Singapore Free Trade Agreement.

Indeed, US businesses have boosted Southeast Asia’s growth and development, bringing in investment, innovation and talent. 

This has fostered a deep reservoir of goodwill for the US, and US companies, here in the region. 

Many of us are familiar with iconic American brands and companies, including many of you here, that have become part of our daily lives.

And the Business Council’s frequent missions to the region, which Ted mentioned earlier, also underscore the dynamic networks and deep friendships you have built, here in Singapore and across ASEAN.

In fact, I understand that this is the second time that Ted and his team are visiting Singapore in 2 months! 

And I happy to hear that you are convening your Annual Board Meeting here tomorrow.

These deep and expansive economic linkages are a critical part of the US’ wider engagement of Southeast Asia that has contributed greatly to regional peace, stability and prosperity over the decades.

In the coming years, as we navigate an even more complex and fast-changing environment, the US’ continued engagement with ASEAN will be even more important.

Today, the world stands at another inflection point with multiple interlocking challenges.

Heightened geopolitical contestation is reshaping the global order.

This flux, compounded by wars in Europe and the Middle East, has given rise to growing fragmentation and fractiousness.

The contestation between the US and China is of deep concern to our region. We have made clear that we seek peace and prosperity, and not to take sides.

Simultaneously, the consensus around globalisation is fraying.

For businesses like yourselves, operating across different markets and geographies, the benefits of globalisation are clear.
 
It has led to greater efficiencies and unlocked new markets, and even regions, for you to do business in.

Incomes and livelihoods, too, have been uplifted by globalisation. Global GDP per capita today is more than 2.4 times what it was in 1995 when the WTO came into being.

At the same time, we must also acknowledge the stresses that arise from globalisation.

Sentiments against globalisation today are underpinned by perceptions that its benefits have been disproportionately concentrated in the hands of a few.

Industries that are less competitive and do not keep pace with competition have been, and can be, displaced, and jobs in those sectors lost.
 
In the wake of the COVID pandemic, contestation and various conflicts, countries and companies are also realigning supply chain patterns to build greater resilience.

In and of itself, greater resilience is a good goal to work towards.
 
Resilience can help businesses stay competitive and profitable in an uncertain global landscape.

But when conflated with notions of zero-sum competition, this can be costly and undermine trust.

It can diminish the exchange of ideas and technologies, and the flow of capital and talent, all of which are vital for continued growth.

Already, we are seeing the impact on trade flows. Global trade shrank by 5%, or an estimated US$1.5 trillion, in 2023.

This is concerning especially at a time when countries around the world, including the US and most of us in Asia, face urgent shared challenges such as climate change, ageing populations and public health, and the opportunities of technological advances, including in the digital sphere. 

To address these challenges and harness these opportunities effectively, we need to both compete and cooperate.

We can and should compete to build distinctive niches of excellence.

But we must also collaborate, to bring our best minds and resources together to tackle shared challenges, especially those that affect all of humanity such as pandemics and climate change. 

Asia and ASEAN especially, as Ted alluded to earlier, offer immense opportunities for US businesses both as an investment destination and a growing consumer market.

With over 670 million people, a young workforce, urbanisation and healthy GDP growth, ASEAN is already the fifth largest economy in the world and is projected to become the fourth largest by 2030.

ASEAN is also one of the fastest-growing digital economies globally.

Last year, we launched negotiations on a Digital Economy Framework Agreement that could help the region unlock up to US$2 trillion in value from the digital economy by 2030.
 
We hope to conclude the agreement by the end of next year, 2025.

The US-ASEAN Business Council and your members epitomise the opportunities, optimism and confidence that US businesses have in ASEAN and its future.

So as we celebrate 40 years of the US-ASEAN Business Council, we must also think about how the Business Council and your members can work with partners from ASEAN to help unlock new growth opportunities, and continue to strengthen the ASEAN-US partnership in the years ahead.

For one, I would suggest that the ASEAN-US partnership is a powerful demonstration of how collaboration, across the public and private sectors, can lead to win-win outcomes.

Amid growing talk of “deglobalisation” and “friendshoring”, the US business community’s engagement with ASEAN over the years has shown how collaborations can tap on complementary strengths and produce mutual benefits.

I earlier mentioned how the US was ASEAN’s second largest trading partner and largest source of foreign direct investment.

This has, over the years, created good jobs and developed capabilities for the workforce in ASEAN.

At the same time, trade and investment with ASEAN also supports more than 625,000 jobs across the US – an interesting data point on the Business Council’s website!

Building such mutually beneficial linkages also strengthens trust and allows us to explore collaboration in new areas.

In the case of the US and ASEAN, it is heartening to see our longstanding ties continually deepen.

In 2022, we upgraded our relationship to a Comprehensive Strategic Partnership.

In December 2023, the US-ASEAN Center was established in Washington DC to strengthen economic and cultural engagement between the US and Southeast Asia.

Within ASEAN, bilateral relationships with the US have also grown from strength to strength.

The US-Singapore Free Trade Agreement was the US’ first Free Trade Agreement with an Asian country and remains its only Free Trade Agreement with an ASEAN country.

Today, Singapore’s trade with the US is almost 3 times what it was in 2004 when the agreement entered into force.

We also host nearly 6,000 US companies in Singapore spanning sectors including semiconductors, infocomm technology, healthcare, carbon services, energy and chemicals, and a whole range of consumer businesses.

Most of these companies are using Singapore as a base to deepen engagement with other ASEAN economies.

Over the past 20 years, the Free Trade Agreement has served as a useful pathfinder for both sides to explore new bases of collaboration.

Building on this, we hope to continue forging long-term and impactful collaborations with partners from the US, including your businesses, to seize opportunities not only in Singapore but also across the region.

Under the Indo-Pacific Economic Framework for Prosperity or IPEF, for example, we are working with the US and other partners to explore collaborations in new and important areas such as supply chains and the green economy.

Since 2023, we have also held 2 iterations of the US-Singapore Critical and Emerging Technology Dialogue. 

This dialogue reflects our common desire to develop trusted, open, accessible and secure technology ecosystems that enable responsible innovation.

Working together to empower such innovation will be critical going forward.

I have spoken at length this evening about the importance of free trade and investment to the continued growth of ASEAN, and indeed the global economy.

Equally so, the future economy, in my view, will be shaped by technology and innovation.

We have all seen how scientific and technological advances in Generative Artificial Intelligence and mRNA vaccines have reshaped entire industries, and our lives, in recent years.

We must therefore collaborate to harness such innovation and keep our economies and workers competitive.

US businesses are among the most innovative in the world. So another role that US businesses can play is to help unlock new innovations and transformation across ASEAN.

Here in Singapore, our economic story has been one of continuous transformation, to keep up with global shifts and harness technology to upgrade our enterprises and workers.

Over the past 8 years, we have been undertaking the latest chapter of this transformation, to prepare our economy to cope with structural global shifts and to ride the waves of change.

We are seeing the fruits of our efforts. 

Between 2016 and 2023, our economy achieved real value-added growth of 2.8% per annum, outpacing most other small, advanced economies at this level of GDP.
 
But the journey of transformation is ongoing. 

One part of this transformation effort has been strengthening our Research, Innovation and Enterprise ecosystem, to which the Government has committed around US$21 billion, between 2021 and 2025.

This includes partnering with industry and academia to pursue mission-oriented research, develop scientific and entrepreneurial talent, and strengthen our companies’ innovation capabilities.

US businesses have a strong reputation for innovation, vitality, and a capacity for continual renewal.

During my two trips to the US last year, I saw firsthand how businesses work alongside universities and research institutes on frontier technologies in areas such as nuclear fusion, genomics and precision medicine.

And US companies, including members of the US-ASEAN Business Council, have been valued partners in Singapore’s economic transformation efforts.

Companies like Google Cloud and Microsoft, for example, are partnering government agencies and businesses from Singapore to build capabilities and harness technologies like Artificial Intelligence for good.

Others, such as Cisco, ExxonMobil and HP Inc, have established Corporate Laboratories with our universities to boost applied research in key areas like artificial intelligence, decarbonisation, healthcare, urban infrastructure, and digital manufacturing.

So I invite even more of you to consider tapping on Singapore as a collaborator, testbed and pathfinder to invest in innovation and achieve new breakthroughs in the region.

Indeed, as we work together to innovate, the new technologies and solutions that arise must be deployed purposefully and for positive impact.

This harks back to the early history of the US-ASEAN Business Council, when you merged with the US-ASEAN Center for Technology Exchange.

In collaborating with businesses and R&D ecosystems here in ASEAN to develop new technologies and novel solutions, including across borders, US businesses can help partners in the region and beyond shape a healthier, more resilient, and more sustainable future.

Here in Singapore, we aspire to be a Global-Asia node of technology, innovation and enterprise.

This means bringing together collaborators from around the world to co-create and scale up novel solutions to pressing challenges facing humanity – from climate change to pandemic preparedness.

And we were honoured to host the inaugural IPEF Clean Investor Forum in June 2024, bringing together investors, project proponents, and innovative start-ups from IPEF partner countries.

Let me conclude.

The partnership that the US and ASEAN enjoy today has been significantly strengthened by the enduring support of the US business community in deepening both bilateral and regional economic ties.

The US-ASEAN Business Council reflects the optimism that the US business community sees in ASEAN.

ASEAN celebrated our 57th anniversary as a grouping on 8 August, 11 days ago. So the US-ASEAN Business Council has been active for more than two-thirds of ASEAN’s existence!

We hope that US businesses, who have benefitted greatly from opportunities in the Southeast Asian market, continue to advocate strongly for greater trade and economic connectivity between the US and ASEAN.

With your expertise, innovation and capital, you have a vital role to play in the road ahead. 

In particular, amid the global transformations underway, it is crucial that we continue working together to demonstrate the value of win-win collaborations, deepen transformation and innovation, and deploy this impactfully to build a more resilient future for all.

Congratulations once again to the US-ASEAN Business Council on your 40th anniversary. I wish you the very best and many more milestones ahead!