Asia-Pacific Forum 2021
“Process of Asia Pacific Cooperation in the post-pandemic era: Opportunities
and prospects”
Session 2: Economic Integration and Trade System of the Asia Pacific
3 December 2021
Presentation by Murray McLean
First of all, I would like to express my appreciation to the Japan Economic
Foundation and the China Institute for Reform and Development for arranging
to hold this online conference under the difficult circumstances caused by theongoing Covid pandemic. May I also welcome and congratulate my old friend
Mr Masakazu Toyoda on his assuming the role of Chairman and CEO of JEF.
As we all know very well the Asia Pacific region has been and continues to be amajor wellspring of global economic growth and prosperity throughout muchof the past sixty years. This has also led to enhanced economic integration
within the broad Indo-Pacific region and lifted billions of people out of poverty.
When we think of how the region may fare in a post-pandemic era, it isessential to have at the top of mind the key factors that have enabled anddriven this prolonged period of consistent economic growth and deepeningeconomic integration.
1. The region has enjoyed relative peace and stability, underpinned by theUS forward strategic posture in the Asia-Pacific, for almost all the years
since the Korean war (notwithstanding other regional conflicts such as
the Indo-China war and other simmering security issues)
2. This relative peace and stability has enabled, indeed encouraged
massive flows of investment and technology transfers (both fromexternal sources (notably the United States and Europe) and from within
the region (notably Japan followed by the Asian tigers and later China)
have taken place. Preferential attraction policies encouraging greater
reliance on market forces and the opening up of hitherto closed orheavily protected economies, have further stimulated this growth.
3. The WTO has played a vital role in liberalising and regulating global (andregional) trade and investment and providing an essential framework forrules-based trade and investment14. In line with global investments and technology transfers, many Asia
Pacific countries became crucial parts of in Global Value Chains GVCs
and Regional VCs
5. The formation of intra-regional groupings of countries and theirassociated dialogue partnerships – of which ASEAN is central - followed
later by the establishment of APEC as a more geographically far-reachingcollaboration have bred and sustained regular habits of consultation andmultilateral engagement within the Asia Pacific region for decades.
Regular engagement in consultative, consensus-based groupings has
become vital in guaranteeing that the interests and concerns of smaller
or medium-sized countries are heard and facilitated.
6. Multiple bilateral and plurilateral trade and investment agreements
between countries within the region and with countries outside theregion supplement the WTO framework and include updated rules andframeworks for new areas of trade and investment.
7. CPTPP as a “gold standard” agreement and the RCEP, separately,
embody more ambitious and up-to-date commitments adding to those
covered by the WTO and its processes. This all enables further
liberalisation and regulation of traditional trade and service trade
including digital commerce
Currently the world, including the Asia Pacific region, is facing major challenges
to its economic growth. These include:• the ongoing impact of the Covid pandemic which has contracted global
demand, reduced trade and investment and hampered people
movement to cite several examples• at the same time global and regional security and trade tensions exist inparallel with growing competition and assertiveness between China andthe United States - a trend that started before the pandemic, but which
has deepened further over the past two years• a disturbing trend by some countries to undermine, ignore or misuse
the WTO processes governing fair trade• we are also seeing the resort to self-interested, unilateral protectionist
moves and coercive trade measures in direct violation of establishedfree trade agreements and WTO rules. In so doing these steps havedistorted market-based trade in goods and services and in some cases
impacted adversely on established GVCs and RVCs.
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So where does this all leave us?
In the first part of these very brief remarks, I outlined seven factors (and thereare probably more) that have facilitated and underpinned the economic
growth and prosperity of the Asia Pacific while leading to greater integration in
the region.
All those seven key factors must remain central to our thinking as it recovers
from setbacks due to the pandemic.
So, first of all, adhering to the multilaterally-agreed rules of the road will be a
crucial element enabling the market to operate as freely and as fairly as
possible, so that trade and investment and people flows can be restored andcontinue to grow and GVCs are not interrupted by protectionism.
Secondly, the use of long-standing consultative and cooperative mechanisms
such as ASEAN and APEC, will be more important than ever so that smaller andmedium sized countries have an ability to raise concerns in a multilateralcontext.
Thirdly, adherence by signatories to the high standards set down under CPTPP
and RCEP will also be important. This is especially so also, if additionalsignatories to these agreements are accepted.
Fourthly, while the CPTPP and RCEP include new rules not covered by theWTO, much more needs to be done to develop rules to reflect and manage therapid changes occurring in the digital economy, to give one example. At thesame time parallel policy support to improve digital infrastructure andconnectivity is needed so that all countries can take the many newopportunities offered by digital technology.
Fifth, continued peace and stability in the Asia Pacific remains paramount toensure ongoing economic prosperity
In conclusion, there is good reason why Asia Pacific Economic integration cancontinue to be nurtured and there is some room to be optimistic if the rules of
the road are followed by all countries and partners in the region.

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