BANGKOK - Asean nations are concerned about the fallout from the ongoing United States-China trade war, and that is why they are emphasising economic integration, Prime Minister Lee Hsien Loong said on Sunday (June 23).

He was responding to questions from Singapore reporters about whether he is noticing an increasingly divided Asean, after the 34th Asean Summit in Bangkok over the weekend.

"They want to pursue multilateral avenues ... and that's one of the reasons why they're putting such emphasis on the RCEP (Regional Comprehensive Economic Partnership) because it's one of the avenues of cooperation which can help us in a situation when the global economy is in troubled water," he said.

The proposed trade pact includes Asean plus India, China, Japan, South Korea, Australia and New Zealand, which collectively are responsible for a third of the world's economic output.

Talks on the trade pact have been taking place since 2013 but reports say negotiations have slowed due to India's reluctance to lower tariffs for fear of being flooded with Chinese imports.

On Friday evening, Asean's economic ministers, including Singapore's Minister for Trade and Industry Chan Chun Sing, met and agreed on the importance of concluding the RCEP negotiations by the end of this year.

On the slowing pace, PM Lee said: "It's not really a deep secret that some of the most complicated issues to resolve are when big economies have to work out with one another what the deal is." He added that some may have domestic political timings to consider.

He noted: "The degree of consensus among the Asean 10 is quite high, but you have to get the partner countries like North-east Asia, India, Australia, New Zealand also to settle the deal, because it's a package, and we will try our best."

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"They are bigger economies than us and in many cases, they have their considerations," he added.

PM Lee, who had in a speech earlier in the day urged his counterparts to stay united, called the divide "a serious issue" owing to the different strategic pulls when it comes to dealing with the trade dispute, which has seen both China and the US imposing punitive tariffs on each other's goods.

"We feel them differently, we're pulled in different directions, so to hold Asean together as one on this issue will not be easy," he said.

But he also noted that all Asean countries have ties with both superpowers: "All of us are going to be negatively impacted if those ties turn sour, and I think there's a high degree of recognition of that and a great desire that third countries not become collateral damage if there is friction or worse between the big powers."

For this reason, he said, he believes Asean members are not taking sides on this issue.

"They just want these to be resolved in a way which will enable global economic cooperation to take place and regional economic integration to take place," he said.

In the meantime, however, he warned that Singaporeans should brace themselves for the impact of trade tensions.

"I think we must expect some fallout. You can already see our economy slowing this year," he said. This year's growth forecast is between 1.5 and 2.5 per cent, lower than last year's 3.1 per cent.

"You can see that our exports have been affected and factories are seeing their orders down, and the mood is significantly dampened," he said.

He also stressed patience: "You cannot just step on the gas and speed up and make up for a less favourable external environment. What we can do is to keep on focusing on upgrading and training, and restructuring of the economy so that we have the productive capability and potential to pick up again when external conditions improve, and to make the best of the conditions as they are now.

"That's what we are doing in Singapore and I think that's what the other economies would like to do too."