Australia-Singapore relations and the rules-based order

The shared interests and values between Australia and Singapore should provide a sense of unity and collaboration in such unprecedented times, writes Chen Chen Lee.

In 2019, when Singapore Prime Minister Lee Hsien Loong met Scott Morrison on his first overseas trip to Singapore as the newly minted Prime Minister of Australia, he said that Australia is one of a few countries with whom Singapore meets at the leadership level every year. Lee emphasized that both Australia and Singapore are natural partners and see eye to eye on many issues including the importance of an open rules based and inclusive multilateral trading system.

The Australia-Singapore bilateral relationship is multi-faceted and bolstered by strong people-to-people links. In recent years, this relationship has only grown as evinced by the establishment of the Comprehensive Strategic Partnership in 2015, a broad-ranging agreement that seeks to deepen engagement across five pillars: economics and trade, defence and foreign affairs, people-to-people, science and innovation, and digital economy. Both countries are Free Trade Agreement partners and within ASEAN, Singapore is Australia’s largest trade and investment partner and the 7th largest overall - investment in Singapore was near AUD$73 billion in 2018.

In 2020, the two countries celebrated their close defence ties with the 30th anniversary of the Singapore Armed Forces training in Shoalwater Bay in Queensland. Singapore and Australia also cooperate closely in multilateral forums such as the Five Power Defence Arrangements and the ASEAN Defence Ministers’ Meeting-Plus. The bilateral security and defence agreements reflect a deep trust between the two states and a shared understanding of the importance of promoting regional order and stability.

If anything, the COVID-19 pandemic crisis has provided greater impetus for Australia and Singapore to work more closely together to reinforce their relationship built on similarities and shared interests for a rules-based regional order that is stable and peaceful. I would like to highlight two particular issues here: regional economic recovery and China.

The latest Singapore-based ISEAS-Yusok Ishak Institute State of Southeast Asia Survey showed most ASEAN countries are worried about domestic economic recovery and rising inequality resulting from COVID. Singapore (and Vietnam) has done well in containing and managing the fallout from COVID-19 but despite so, its national recovery is tied to, and will be affected by economic recession in the region. Australia could work closely with Singapore in stepping up regional economic integration to: i) ensure supply chains remain open for essential items such as medical supplies and intermediate items; and ii) promote economic resilience within South East Asia.

One way to achieve this is through the implementation of the Regional Comprehensive Economic Partnership (RCEP), which is expected to be a driver of the recovery of its member countries in a post-pandemic era. RCEP has the potential to harmonise rules and facilitate business transactions across the multiple and overlapping Free Trade Agreements in the region, that will ultimately benefit not just the big players but also small and medium enterprises which form the bedrock of most of the Southeast Asian economies.

The current crisis has accelerated digital transformation and underscored its importance for mitigating the economic slowdown and speeding up recovery. Digital commerce can be used to unlock a wider consumer base during the pandemic and in the long term. The digital economy in Southeast Asia has been estimated to be worth some $300 billion by 2025. However ASEAN governments are challenged to address the digital divide across and within ASEAN in infrastructure, skills, and rules and regulations regarding privacy, security and ethics. In this respect, the newly created Digital Economy Agreement between Australia and Singapore could help drive the setting of regional standards in a range of areas such as trade facilitation, data sharing, data storage, data protection, digital identities, fintech, e-payment, etc.

On China, Australia could draw lessons from Singapore in navigating relations with its largest trading partner. As like-minded middle powers, Australia and Singapore are not without agency in responding to a hardening US-China competition and a more contested Indo-Pacific region. Both countries have concerns about China’s growing economic and strategic influence in the region and like Australia, Singapore has been at the receiving end of economic retaliation and political censure.

The geopolitical and security landscape in Southeast Asia is rapidly evolving and entering a period of heightened contestation. The shared interests and values between Australia and Singapore should provide a sense of unity and collaboration in such unprecedented times. The similarities should not be overlooked and should be utilised to deepen and expand the already strong bilateral relationship between the two countries.

Chen Chen Lee is a diplomacy adviser at Asialink. Catherine Hooton is an intern at Asialink.This piece was first published in the La Trobe Asia Brief Issue 5 - Australia-Southeast Asia Relations: The post COVID-19 regional order.