Interview by PM Lee Hsien Loong with NHK (Dec 2013)

Trans-Pacific Partnership (TPP)

PM: I think the TPP has made quite a lot of progress, There is a lot of determination to complete the agreement. We have declared a goal of completing it substantially by this month, December, and we are trying our best. Many chapters have been settled. There are a few which are outstanding, I think seven, eight chapters, where the issues are more difficult and the Ministers are still working on it. Part of the reason is that we now have somewhat more participants in the TPP – Mexico has joined in; Canada has joined in; so has Japan. And so that brings more complexity. Part of the reason is that the TPP aspires to be a high quality agreement, so the ambition is high and that means difficult decisions have to be made. Part of the reason also, candidly, is that many of the governments will be under political pressure at home to protect their own sensitive areas and to advance their own offensive interests, be it intellectual property, be it agriculture. These are issues which all governments face. So when you have trade negotiations, it is always very difficult up to the last minute.

Trans-Pacific Strategic Economic Partnership Agreement (P4)

PM: Well, I think the P4 was a good agreement, but I think the TPP is even more ambitious than the P4. And it has become a much more complicated agreement, many more chapters. There are issues which are there which were never part of the P4 FTA, for example, issues concerning SOEs or issues concerning intellectual property. These are new areas which we are venturing into. Some of them are not even areas which are regularly found in FTAs. So I think that we have to do work. In the end, we want a good agreement, but we also want an agreement to be there, so we have to be practical and to make adjustments in order to get a good outcome. If we insist on a perfect outcome, I think that may be very difficult.

Japan’s approach to TPP negotiations

PM: Well, I think the negotiators are talking about it. Of course from the point of view of most of the countries, the approach taken in the TPP is that all tariff lines are included. And eventually you will be at zero tariffs for all the tariff lines, and there are no exclusions. So you can find other ways to help your industries and to support them, but you cannot do it by closing your market. I think that is something difficult which the Japanese government is aware of, and which it was fully conscious of even before entering into the TPP discussions, because even the previous government under Mr Noda published a paper talking about the revitalisation of the Japanese agriculture sector. And Mr Abe in his second term as Prime Minister, he has also expressed his ambition to revitalise the Japanese agricultural industry. So I think that Japan understands the challenge and what it needs to do, not only because of the TPP, but also because of its domestic policy reasons, because it wants to revitalise its economy and be on a sustainable basis for the long term. I read somewhere that the Japanese farmer, the median age now is 67 years old. Well, I think Japanese are in good health till a very old age, but I think for a 67-year-old farmer to carry on and in 10 years’ time to be still operating in this way, I think that is a quite a challenge. So I believe Japan understands it has to make some changes in order to bring itself not only in line with its international desires to integrate, but also in line with its own social changes within Japan itself.

Air Defence Identification Zone (ADIZ)

PM: We are not a Northeast Asian country, we are a Southeast Asian country, but we are an air hub. Changi Airport, we have 50 million passengers a year. Many of the flights fly through Northeast Asia, so we have a concern of Northeast Asia, from a civil aviation point of view. We also have a concern of Northeast Asia from the overall regional stability point of view. In terms of civil aviation, I think what we would like to know is also what all the airlines would like to know: how does the new ADIZ, or the ADIZs because now the Koreans have also extended theirs, how do these new ADIZs affect civil aviation, over-flights? How will it be implemented? What do pilots have to do? What happens to the normal aeroplane flights through the region? And I see that ICAO and IATA have sought clarification from China. And Singapore has also sought clarification from China on what this means for civil aviation. That’s one aspect of the ADIZ. The other aspect is a question of stability, of security, of the political relations between the countries. And there, ADIZ, the latest ADIZ changes are just once one in a long series of actions which have been taken. Actions, reactions, further actions, these are issues, problems which have been there for quite a long time. It is very hard to trace back where exactly they began in recent times. If you look at the most recent issue of Senkaku or the Chinese call it Diaoyu Islands, then perhaps one of the significant actions was when Mr Ishihara, the Tokyo Governor, announced that he was going to take over the islands. That triggered a series of moves on the Japanese side, the Chinese side, and the result has been more tension and more suspicion on all sides. There are similar tensions between Japan and Korea. There are also disputes between Korea and China. If you trace them even further back than very recent times, it goes back at least as far as the Second World War, and what happened after the Second World War and what was not resolved after the Second World War.   In these disputes, it is very difficult to say who is right, who is wrong, but all parties really ought to maintain restraint and avoid taking action which can escalate or lead to misunderstanding or lead to some mishap and unintended consequence. Because I don’t think any of the parties want a conflict. But the more basic issue of the good relations between the countries, I think also needs to be addressed progressively over a period of time. It cannot be done quickly because these are historical issues and many deep sentiments and emotions are involved and expectations of the people and sentiments of the general public in all of the countries. But I would say that it’s really a pity that after the Second World War, the issues were not resolved more satisfactorily, like they were in Europe, and we should try to move in that direction rather than reopening these issues and raking over old wounds which would lead to unhappiness, whether it is over what aggression means, whether it is over comfort women, whether it is over what happened where. These are issues which can only cause further misunderstanding, if they are reopened. You have to know what happened in the past, we have to move on. We are in the 21^st Century, this is not the 20^th Century; nobody wants to go to war. It is not the same situation as in the 1930s, or 1940s, when Asia and the whole world was engulfed in conflict, and we don’t want to be there again.

Singapore and Japan Relations

PM: Well, between Singapore and Japan, we have had an understanding. I mean, we had had very difficult times during the Second World War, three and a half years, or three years seven months, from 1942 all the way to August 1945. And the people who lived through that time will never forget it, or forget the people who perished during that time. But as I said, you must know the history, and you must move ahead. And in the 1960s, we settled the matter with the Japanese. We moved on. And we have very good relationship with Japan, in terms of investments, in terms of tourism, toing and froing between our peoples, in terms of economic cooperation with third countries, in terms of encouraging Japan to participate in an active role in Asia. I think as far as Singapore is concerned, with the Japanese government and successive governments, we have very, very good relationship. I think it is quite clear that Japan’s policy is a pacifist one – your constitution says so. But I think what causes problems is two things. One, from time to time, there are statements and actions by individual Japanese people in the political sphere, from different political parties, which cause alarm and consternation, and you know what they are. Sometimes somebody in Osaka say something; sometimes somebody in Tokyo say something; sometimes politicians go on an anniversary and visit the Yasukuni Shrine and temperatures go up every time. So that causes a problem. I think also between Southeast Asia and Northeast Asia, I think Southeast Asia suffered grievously, but in Northeast Asia, the history is even longer. So in Northeast Asia, between Japan and Korea, between Japan and China, the history is not just three years seven months, but many years of occupation, war. Tens of millions of people died. So it is a very deep issue which is not easy to overcome, and I think that is the reason why Japan has to make an extra effort to continue to be able to live at peace and cooperatively with its neighbours.

Future of Japan- Singapore Bilateral Relations

PM: We are learning from each other’s experiences in this aspect of ageing population, of inadequate births, too low a reproductive rate, fertility rate. I don’t think there are any easy solutions. In Japan, the ageing process has gone further than in Singapore. Your elderly population proportion is higher. The adjustments you have had to make in your society to look them, to accommodate them, to make sure that their needs are seen to. The technology to help to care for them, feeding, bathing, household conveniences, lifts, these are things where you have a lot of experience and where we should learn from you. In other areas, I think between Singapore and Japan, we have had a good relationship with successive governments in Japan. We have encouraged Japan to use Singapore as a base in order to operate in the region, training programs to disseminate Japanese culture, Japanese soft power if you would like. In fact there is a Japan Creative Centre (JCC) in Singapore, which I had suggested to my counterpart some years ago, and it is now operating in Singapore. It is one of the ways in which you can show the region that Japan has a lot to offer, language, food, fashion, technology. I see that your Japanese traditional food, the Edo’s Kaiseki has just become a world cultural heritage and there are a lot of Kaiseki places in Singapore, and I look forward to trying some of them in Tokyo when I am there as well.

ASEAN Community

PM: We are aiming for an ASEAN Community by 2015. That’s two more years. I think we are making progress towards that goal. If you look at the economic community, the economic objectives, we are probably about 85% complete. The remaining 15% of course are the most difficult ones, but we will continue to make progress. We may or may not reach 100%, but I think we will have a substantial package by 2015, by the deadline. Our ambition is not the same as the European ambition. The European Union is one single market, single currency, free movement of people, multiple governments, multiple fiscal policies, so it lives with different problems. We are not aiming that high. We just want closer economic cooperation, free trade in goods, services, free movement of investments, of professionals, air services. These are things which I think are practical and which we can do. What are the difficulties? The same as the difficulties which would face Japan when you are trying to reform your economy, to restructure, to open up, to let the not-so-competitive parts of the economy fade away and to reinforce the more competitive parts of the economy. And this is a painful business, especially when it includes multiple countries which are not only at very different levels of development, but also have very different approaches to economic development. Some are free market; some are more command oriented; some have very prominent government role; others are not. Some are completely resource-dependant; others have no resource at all. So in this circumstance, to form a free market and to reach a common perspective on what we are trying to achieve is a big challenge. But it is worth trying.

ASEAN and Japan

PM: We hope Japan will play a major role as it had played in the 20^th Century, particularly after the 1960s, 70s, 80s, 90s. After the 90s, there was some challenge because Japan entered a long period of recovering from the excesses of the bubble economy, but I believe that Japan is an economy with a very high level of education, very high level of technology, very considerable resilience and determination, and it is still one of the biggest economies in the world. If you look at it in terms of size, maybe China is bigger, but if you look at it in terms of capability and ability to influence the region in a positive way, I think Japan is not less than China. So we hope that we would be able to build the ASEAN–Japan relationship. Formal relations between ASEAN and Japan have been several decades, but the substance of it we have been working on. It is important that we not only celebrate the milestone of an anniversary, but also work towards substantial achievements. For example, our Common Economic Partnership Agreement, the CEPA between ASEAN and Japan, the goods chapter is settled, the services chapter is still work in progress and that is more than 10 years since we launched into this. I think we should commit ourselves seriously to reach an agreement and to settle that. When we talk about economic cooperation and integration, there is substance, we are putting policies there which will help this to happen.  It is not just a declaration of good intent. There are other areas where you can cooperate, for example in civil aviation, air services. Air services are growing all over the region, but between ASEAN and Japan, generally, or even between Singapore and Japan, I think the air services have not grown as far as they could. Many countries are now working to liberalise air services. Among ASEAN countries, also between ASEAN and other partners like India. Even with China we are talking about enhancing air services, not just between ASEAN and China, but even 5^th freedom, which means beyond in both directions. ASEAN carriers from China to other destinations, Chinese carries from ASEAN to other destinations. I think we are talking about the possibility of civil aviation even with also Korea. I think it would be good if we could similarly enhance our civil aviation links between ASEAN and Japan, because with more links will come more travel, the business will go, the traffic will grow, and the opportunity for us to cooperate with one another and to integrate our economies, and to enable Japan to play a major role in this region will also grow.

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