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Singapore slings a trade war antidote

Singapore slings a trade war antidote

Singapore became the first of 46 countries to sign a new United Nations (UN) treaty on commercial mediation on August 7, when officials from 70 nations convened in the city-state to officiate an agreement designed to facilitate global trade and resolve cross-border disputes.

The Singapore Convention on Mediation, the first treaty concluded under UN auspices to be named after the city-state, aims to give businesses greater confidence to settle international disputes through mediation, which involves a neutral party working with different sides to come to an agreement rather than resort to costly court proceedings.

While both the United States and China remain at loggerheads in an escalating trade war, the world’s two largest economies were among the convention’s first signatories, an outcome that observers see as a small coup for Singapore, a staunch free trade advocate that has cautioned against an unravelling of multilateral institutions.

Once ratified, the treaty’s provisions establish a framework for commercial parties in a dispute to enter a mediated negotiation with the ability to enforce the terms of a settlement in any of the convention’s signatory jurisdictions. Parties to the treaty are obliged to ensure that the terms of any settlement are enforced by their courts.

The new convention cements Singapore’s position as a leading dispute resolution hub at a time when cross-border commercial and trade disputes are on the rise. The city-state’s international arbitration center handles one of the world’s largest administered annual caseloads, while the nation plays host to more than 130 foreign law firms.

Prime Minister Lee Hsien Loong hailed the symbolic importance of the convention, which was drafted and negotiated by a working group chaired by a Singaporean, as a “powerful statement in support of multilateralism” that would help advance international trade, commerce and investment at a time when multilateralism suffers from a loss of confidence.

“Today, a group of states have come together to recommit ourselves to multilateralism and to declare that we remain open for business, we are prepared to make binding commitments, and we are committed to preserving our relationships,” he said, adding that all countries stand to lose in an alternative world order where “might is right.”