Asia-Pacific Forum 2021
“Process of Asia Pacific Cooperation in the Post Pandemic Era:
Opportunities and Prospects”

Opening Remarks
Mr. Masakazu TOYODA
The speaker welcomes the participants, and talks briefly about the history of theforum, his role, and his previous experience. He notes that he is pleased to be able
to hold this Asia-Pacific Forum in cooperation with CIRD, given that bothorganizations as well as the forum itself are celebrating anniversaries. He
subsequently recaps the topics that the forum has discussed in the preceding few
years before setting out the two-session format that the event will take, the firstsession being entitled “Growth Strategy of Asia-Pacific” and focusing mainly on a
post-pandemic recovery, with the second session being entitled “Economic
Integration and Trade System of Asia-Pacific”. The speaker says that although Asia
is becoming increasingly integrated, there are still many challenges. He notes thediversity of Asia and his view that it is possible for countries to learn from eachother’s best practice while respecting their differences. The speaker explains thatwhile the forum will last only for one day and be online due to Covid-19, heanticipates a lively and fruitful discussion leading to a constructive outcome.
Opening Remarks and Keynote Speech
Mr. CHI Fulin
Promote Asia-Pacific economic cooperation for an integrated regional market
Recommended and facilitated by Prof. Zhang Yunling, CIRD started to participate
in the Asia-Pacific Forum from this year on. With Japan Economic Foundation andthe experts here today, we will work together for this think tank cooperation platformto promote regional cooperation and sustainable development in Asia-Pacific.
2021 marks the 30th anniversary of China’s participation in APEC. In his remarks
at 28th APEC Economic Leaders' Meeting on November 12th, president Xi Jinping
said, “Openness is the lifeline of Asia-Pacific cooperation. We need to uphold open
regionalism, follow the guidance of the APEC Vision 2040 in advancing regional
economic integration, and work for the early realization of a high-standard Free
Trade Area of the Asia-Pacific (FTAAP).”
Against the background of unprecedented global changes and the covid-19 pandemic,
1economies at Asia-Pacific region are facing many common challenges. Choosing
cooperation is a strategic choice and the fundamental way out.
1. Take building up an integrated regional market as a key objective.
To tap the potential of long-term growth in the Asia-Pacific region, the choice of route
would be working together for the early realization of FTAAP by building up an
integrated regional market as a major objective.
In recent years, Asia-Pacific region has become the major driver for world economic
growth. APEC member states contributed more than 70% of the world GDP growthin 2019, rising from around 50% in 2000. As a member state, China has contributed
around 30% of the global GDP growth for a number of consecutive years. During thisperiod, the total GDP of the region has been increased from 55.9% to 60.4% of the
global total.
To promote FTAAP, we are facing not only challenges of unilateralism, nationalismand exclusive regionalism, but also diverging growth of regional economies anduncertainty of regional economic recovery. Against such a special background, weneed to promote an open, balanced, coordinated and inclusive Asia-Pacific economic
landscape, by aiming at building an integrated regional market, with FTAAP as an
instrument, with enhanced interconnection of infrastructure as a guarantee and on
the basis of promoting full economic recovery of the region.
2. Initiate the harmonization of rules, regulations, standards and management
practices.
RECP is to take effect from next year, and this is a historic breakthrough for theregional economic integration in Asia-Pacific.
At the same time, we need to be aware that there have been fragmentation anddifferent levels in opening for FTAs in the region. Trade barriers of regional
economies remain comparatively high, leading to the lag of the regional economic
integration and making it difficult to maximize the utilization of cooperation
potentials in the region.
China has formally applied to join CPTPP, and it takes “promoting institutional
opening in rules, regulations, standards and management practices” as a major
measure for higher level of opening-up. Now we need to study how to benchmark
high-level economic and trade rules for Asia-Pacific economic cooperation, to prepareinternal roadmaps and timetables for opening-up efforts, we shall also try tocoordinate the interests among countries with different development levels, andpromote reform and opening-up accordingly, based on our respective competitive2

advantages, for early realization of FTAAP. What’s more, when faced with newfeatures and new trends for the tertiarization- and digitalization- driven
globalization, economies in Asia Pacific region need to take the initiative to develop
open and inclusive regional government rules.
3. Enhance practical cooperation in such areas as public health security andpopulation ageing.
Covid-19 pandemic and population ageing are important variables that affectsustainable growth.
Currently, the challenge of pandemic remains critical. Economies in Asia-Pacificneed to enhance cooperation in virus testing, as well as R&D in vaccines, medical
supplies and medical equipment, in order to promote circulation of critical supplies,
to build up a secure and reliable medical supply chain to fight covid-19, and to ensure
regional public health security.
In addition, population ageing and low fertility have become common challenges for
the Asia-Pacific region. It is estimated that by 2050, a quarter of the population in
the Asia-Pacific region will be over 60 years old, which is three times the number in2010. To address population aging, the Asia-Pacific economies need policy exchanges
and mutual learning, and should carry out practical cooperation in many fields suchas nursing, elderly care, introducing ageing facilities, and developing elderly careindustries.
4. Deepen people-to-people exchange with that of think tanks, education and youth
as priorities.
- Support and facilitate more think tank exchange and cooperation, utilize theunique role of think tanks in offering intellectual support, positively influencing
public opinions, and effectively communicating positions through track II dialogues.
- Enhance exchange and cooperation in education, especially in the opening andcooperation of vocational education in tourism, elderly care and health care, efforts
should be made to promote mutual recognition of diplomas, degrees and professional
qualifications.
- Carry out various cultural exchange for youth. Joint efforts could be made to
develop and offer Asia-Pacific Young Leaders Program in economy & trade, academia,
culture and environmental protection. I understand that Asia-Pacific Forum is an
important platform for think tank cooperation in the region, and I would like tosuggest further efforts could be made to establish a think tank alliance for the AsiaPacific.
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5. Take Hainan Free Trade Port as one of the platforms for Asia-Pacific economic
cooperation.
Hainan Free Trade Port could be an important economic cooperation platform for the
Asia-Pacific region, as it has a favorable geographical location as a hub in the region,and it is a connecting point to a huge market of 1.4 billion consumers.
I would like to suggest to set up industrial parks and innovation parks, with tourism,
medical care, marine and digital industries as the priority, at Hainan Free TradePort. These parks will mainly be aiming at cooperation among Asia-Pacificeconomies. At the same time, we need to attract relevant Asia-Pacific institutions to
set up offices in Hainan, making joint efforts to utilize platforms like Boao Forum
for Asia to further exchange and cooperation.
This year marks the 30th anniversary of CIRD. Promoting regional economic
integration of the Asia-Pacific has been one of CIRD’s research priorities. CIRD has
been continuously co-organize CJK Cooperation Dialogue with its counterparts, italso initiated Revitalizing Northeast and Regional Cooperation of Northeast Asia
Forum, international forum of Hainan Free Trade Port and Regional Cooperation
with Southeast Asia with its partners. Hereby, we welcome think tanks and scholarsof this Asia-Pacific Forum to participate CIRD’s academic activities, which aim topromote regional cooperation.
Session 1: Growth Strategy of Asia-PacificModerator
The moderator states that he is always honored to moderate the forum, and saysthat he distributed four questions to the panelists in advance. The first question
concerns the panelists’ views on economic growth in their own country against the
backdrop of the ongoing pandemic and vaccination campaigns, given his assertion
that a high level of economic growth is required to achieve structural reform
encourage trade liberalization. The second question concerns the positive impact ofdigitalization on growth in each of the relevant countries. The third question
concerns the cost of green growth, and the fourth question concerns the role thatSMEs, especially startups, play in promoting structural economic reform. The
speaker goes on to invite the panelists to give their 5-minute presentations.
Panelist A
The panelist asserts that China is still the main driving force in the Asia-Pacific area,4and while there is a general downturn in the Chinese economy, it is still on course tomeet projections. The main theme of policy in China is to make the country more
open by opening more sectors and becoming more rule-based (especially in terms ofthe digital economy.) The panelist points to China’s application to join the CPTPP,
but expresses pessimism, stating that a lot depends on Japan’s policy.
In terms of restructuring, the main effect is from carbon policy, and the many sudden
actions taken this year have caused problems. Green development should take placethrough cooperation rather than each country approaching it individually.
The panelist expresses concern at the Biden administration’s policy of decoupling.
The strategic competition-based framework in the Indo-Pacific, strongly supported
by Japan, challenges the cooperation-based framework in the Asia Pacific, and thishas created uncertainty. This presents a challenge to the Asia-Pacific, but one way
to deal with this would be to link the RCEP and CPTPP rather than compete.
China has a clear policy: continue to open the country and join any kind of rule-based
system.
Panelist B
The panelist states that the Korean economy is doing well, except for a few problems.
Despite a contraction in the previous year, this year the economy will bounce back toaround 4.3% growth, but there is a serious unemployment problem, with youth
unemployment standing at 10%. Household and government debt is also rising
quickly.
Concerning macroeconomic issues in the Asia-Pacific, ongoing Covid-19 vaccination
campaigns have provided growth momentum, but there are questions over its
durability. In terms of collective action, early-vaccinated high-income countries andvaccine manufacturers should support regional vaccine production in the near-termand COVAX through financing and technology transfer as the pandemic will only
end when all countries have overcome it.
Supply chain disruption has resulted in nationalism and protectionism, so the riskof dependence on a few countries needs to be overcome by diversifying to achieve
resilience. The panelist proposes cross-border vertical foreign direct investment for
this, and says Greenfield and M&A should be encouraged in supply chain networks
to create jobs.
The Asia-Pacific economy should make a stronger, concrete commitment to growgreen growth to meet the target of the United Nations Climate Change Conference,and become carbon neutral should be seen as an opportunity rather than a risk.
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SME and startups in the Asia-Pacific need to be a part of the innovation andmanufacturing ecosystem, and the panelist urges Asia-Pacific economies to create
an open SME knowledge platform for regional collaboration.
In light of the soon to be enacted RCEP, the already enacted CPTPP should expand
to become the most advanced and wide-reaching rule-based trade and investment
framework in order to shun protectionist policies.
Finally, the panelist argues that APEC and G20 should be made more effective androbust for a better free trade and investment system to ensure inclusive growth, andconcludes that Asia-Pacific economies should stick to a rule-based regional trade andinvestment system.
Panelist C
The panelist says that innovation and manufacturing represent a possible way
forward in dealing with Covid-19. All countries in the Asian region have tried toadapt to Covid-19, with businesses evolving and creating new and strategic plans.
This is becoming quite evident in India, with Q3 results showing continued
expansion and resulting in the fourth consecutive quarter of growth. The Indian
economy is bouncing back with 7.8% growth expected, and 8.4% the following year.
The panelist remarks that India has now given a first shot of Covid-19 vaccine to
82% of its population, with 45% having had their second shot, thus increasing theinsulation of economic activity. The country has exported 197 million doses tosurrounding countries and Africa, and mutual cooperation is creating greater
engagement abilities.
The Indian government’s response has also evolved. GST collection is rising, andexports have rebounded, and increasing credit expansion is being observed in India,
and these three factors have greatly influenced monetary and fiscal policy.
The panelist notes the importance of technology and mentions fintech-related
initiatives in India, placing importance on a potential fintech corridor between India
and Singapore. The panelist then mentions that according to the ADB’s SME monitor,
SMEs account for 99% of enterprise in cottage industries, and 33% of GDP in South
Asia. This illustrates their importance, and the panelist asserts that MSMEs need
to be focused on. Efforts in India are concentrated on ensuring access to credit forthem, and this is why exports are bouncing back. With regards to policy coordination,
the panelist suggests Indonesia’s leadership of the G20 and India’s in 2023 will be
important.

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Panelist D
The panelist states their intention to discuss post-pandemic prospects for Myanmar,
starting with the Covid-19 situation. Myanmar’s partial vaccination rate is 31.7%,
with a full vaccination rate of 20%. The data suggests that Covid-19 is under control,and businesses have resumed their functions in line with their contracts.
Although economic growth was forecast to be 1.8% by the ADB in 2020, Covid-19, a
state of emergency, and international pressure on the business sector have resulted
in growth being down. The ILO estimates that 3.2 million jobs have been lost, there
is difficulty in accessing financial and banking services, reduced mobility, weakened
consumption, investment, and trade, operations have been disrupted, and there is
instability in the exchange rate.
Digitalization is Covid-19-driven in Myanmar, which has a cash dominant financial
system. The country has a mobile subscriber rate of 1.5 times the population,
meaning many people have two or more mobile phones, but only half the population
has access to the internet.
While Myanmar has many laws on environmental conservation, it still has a long
way to go in terms of clean technology. The panelist notes that there are many
opportunities for investment, including renewable energy, resilient smart electricity
grids, waste management systems, and electric vehicles like cars and trains,
although there are challenges in terms of human resources, technical requirements,
and natural resource management.
MSMEs comprise more than 99% of business in Myanmar, and contribute 36% ofGDP. The informal economy presents a large challenge, and even though there arelaws in place, there is a lack of enforcement. It is important for MSMEs tounderstand laws and regulations. While human resource and competency challenges
remain and illegal trade has a large impact on SME growth, there are opportunities
to leapfrog to a cleaner, digitized future.
The panelist notes that in the post-pandemic era there will still be challenges due tothe political crisis and sanctions, but there are also opportunities. The country is
struggling and needs help from the Asia-Pacific if it is to avoid a contraction of 18%
as the World Bank expects.
Panelist E
The panelist states that in the Covid-19 pandemic in Vietnam, there have threefactors behind economic performance: how Covid-19 has been controlled, good policy
to respond to the pandemic and support people and business, and utilization of FTAs.
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Vietnam has been successful in controlling the first three outbreaks, but the fourth
has caused problems and economic growth has been affected. Vaccination has now
picked up pace and the policy has changed to living with Covid-19.
Social, fiscal, and monetary has been geared to supporting people, and the pace ofinvestment has been picked up, particularly in infrastructure. However, the scale ofthe measures has been smaller than other countries in terms of GDP and based
mainly on monetary policy. Vietnam managed to keep growing last year, but thisyear is unable to keep pace with the recovery of partners in many areas. The hope isfor high economic growth of 6.5% next year.
The Vietnamese government is currently drafting a new program for recovery overthe next two years that have a larger scale in terms of GDP, and structural andinstitutional reform shall continue along with this. Vietnam will deepen its focus onbuilding macroeconomic resilience, private sector development, and leveraging its
advantages in terms of integration.
The panelist notes that Vietnam is also promoting innovation and startups with
innovation centers in Hanoi, Ho Chi Minh City, and Da Nang, and an attempt will
be made in a few years to develop a financial center, perhaps in Ho Chi Minh City.
Moderator
The moderator thanks the panelists and declares that proceedings will now move on
to comments on the five presentations from discussants.
Discussant A
From the perspective of the research that ERIA does, we have noted some markers
for the coming years. Our concern is mostly development in Asia and the Asia-Pacific.
Liquidity infusion is becoming more difficult for developing Asia, making it difficult
to implement any growth strategy, and this will continue to be a concern in the
coming months.
Limited mobility of people gives Southeast Asia a unique problem in the services
sector. Rebuilding demand for goods and services is important as trade has remained
average throughout this crisis, but incomes have been impacted negatively in greater
degree. Growth strategies will have to be inclusive, and they must examine theentire future of work. New strategies and perspectives for growth in post pandemic
world will be required.
From a global perspective, supply chains in Asia have been resilient to trade tensions
and the pandemic, thus far. At the same time, there is a realignment towards the8economic architecture of the Indo-Pacific. While the US and EU pledge to beimportant contributors, it will likely be Asia itself that will define the new economic
linkages in the Indo Pacific economic architecture.
With the G20 coming to the global south, will it become more inclusive and take into
account the concerns of developing economies? If it does, and includes mechanisms
for recovery from the pandemic, then the G20 can be an important indicator of the
future of multilateralism.
Discussant B
The COVID pandemic has provided an opportunity to reflect on our pace of working
and the content of development, particularly in terms of modes of production andconsumption, our role in the universe, our relationship with the external
environment and our internal humble self, that is worthy of our efforts in promoting
civilization.
The business community in Taiwan has recently been discussing the environmentand social governance, discussing matters beyond GDP and going beyond
shareholder supremacy.

Instead of these things, the focus is on climate change,carbon footprint, carbon neutrality, net zero, green credit, and supply chain greening.
Discussant C
Two important issues require our core attention: how to optimize the benefits ofdigital transformation and to reduce its adverse effects, and how to efficiently andeffectively transition to a greener and sustainable economy. These are two of threepriorities that Indonesia will tackle at the G20 next year, the other one being how tostrengthen global health systems.
Indonesia would like to work on its digital transformation and transition to a green
economy, but there are challenges. Indonesia still needs to deal with the pandemic
and to strengthen its economic recovery, although the situation has improved a lot
over the last four months. Covid-19 transmission is largely under control and theeconomy is fast growing, but Indonesia is still struggling to make rapid progress interms of the digital economy. Indonesia still needs, among other things, better digitalconnectivity as well as a sufficient digital and supportive regulatory framework to
maximize the benefits of digital technology.
To transition to a green economy, Indonesia, and most countries in Asia-Pacific, stillrequire a lot of investment and financing.

Moreover, transition to a greener

economy requires a big shift of paradigm and a significant change in its existing9

economic institutions. With the support of the global community and greater
cooperation with other Asia-Pacific countries, I’m optimistic that Indonesia andother developing countries in the Asia-Pacific can achieve this.
Discussant D
I’d like to discuss two main points.
The first point is that countries in Asia need to rethink their economic development
model instead of balancing between sectors. In the case of Thailand, for example, thebelief was that the country is well-balanced in terms of manufacturing goods andagricultural products yet also having a really big tourism sector. But when the
COVID pandemic happened, the tourism sector halted and this created a lot of
economic hardship for many Thai people. The economy needs to have a morebalanced portfolio, while being more inclusive as well as more environmentallyfriendly.
My second point is that looking forward to a post-COVID world, I think there will be
new development objectives. The focus in the past was largely on efficiency, and weused just-in-time production. But in the future, we will need to have multiple
development objectives - not only for efficiency and growth but also for risk
management. As well as just-in-time, there will also be just-in-case for contingencies.
There will also be new constraints in development since households, the corporate
sector, and the government have a greater financial burden and fiscal burden fromfighting the pandemic. We need to be not only more resilient, but also more efficientin terms of using resources. Digitalization can be a tool to achieve this.
Moderator
The moderator thanks the discussants for their contributions.
Before the start of the discussion, the moderator notes that they are glad that thenations are dealing with the pandemic well, and while there are still uncertainties,
the economies have overcome the most serious difficulties. The moderator also notes
the importance of the digital economy as it is growth driver that will provide theleeway for reform, liberalization, and cooperation. This is also a growth driver, andthus a virtuous cycle will be formed.
The moderator now moves the proceedings on to the discussion with audience
participation.

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Discussion
Discussant C
I will start by looking at digital transformation. It is sure to be the future of oureconomy, and will bring a lot of benefits to our economic growth and economic
development.

There are naturally many things that need to be done, not only interms of connectivity issues or domestic regulatory framework to support the digital
economy, but the creation of an international arrangement on the digital economy
because this digital transformation has actually already transformed the way
transactions are performed, not only in the domestic economy but also across borders.
More supportive rules and arrangements will also be required at the regional level.
I think countries in the Asia-Pacific need to speed up this kind of action.
Moderator
This is an important point. We need rules for data flow, e-commerce and other suchmatters. Are there any other views on this?
Discussant D
I think digitalization is really important for recovery and generating new growth in
the post-COVID world. However, the obstacles in Thailand, as I'm sure they are inother countries, are in the government sector. Digital government services are very
important. The private sector has already quickly transformed its business model,
and people can work from anywhere.

Transactions can be conducted online, but

problems always arise when the government is involved.
There are so many matters in government legislation and regulations that are
outdated and have to be upgraded so that we can move forward to the digital economy.
Participant A
While I do support the idea of promoting the digital economy, I would like mention
possible negative impacts of the digital economy or digitalization. One is possible
unemployment. As we know, digitalization tends to reduce the demand for labor, andthis leads to unemployment. When unemployment comes into the picture, I would
like to know how the labor market will respond. This is related to regulation in thelabor market, and if we have a flexible labor market, the cost of unemployment canbe reduced. So, I would like to ask the panelists what the labor market situation isin their country, and is the country ready to deal with any unemployment which may
arise from digitalization?
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Panelist B
In Korea, there is a well-developed digitalization background across all sectors.
When many factories and services providers started to adopt a digitalization
program, we see that a lot of people become unemployed, especially at SMEs. Rather
than giving a direct subsidy to help deal with the current pandemic, I have suggested
that the government provide some vouchers for a very comprehensive digitaltraining program because the people who work at SMEs are off work anyway while
factories are shut down. This is one thing we can do, encouraging digitalization at
the very starting point for self-employed people. But many business sectors above
those self-employed people and many companies have started to adopt digitalization.
As such, the Korean education system is now trying to make digital courses, courses
on AI, and other such major compulsory courses from elementary to middle andsenior high school, and even at college. So, I think we really need to institute a
digital training program throughout the entire education system.
This is our national agenda, but Asia-Pacific-wide, I would like to emphasize thatthe region needs to agree on a digital open e-commerce platform for our struggling
SMEs. This should be our region-wide effort.
Moderator
Are there any comments on the negative aspects of digitalization?
Discussant A
Labor is substitutable in the digital economy, but this substitutability has not exactly
been calculated.

Establishing policies for the replacement of labor is a hugechallenge before governments at this time, more so, in those countries where thedigital economy is emerging. Because the degree of substitutability is still largely
unknown, it becomes a challenge from a policy perspective.
However, the digital economy and digitalization increase the productivity of skilledlabor while being likely to reduce the participation of unskilled or low-skilled labor.
Manufacturing is not going to go away in the digital economy, and while the natureof manufacturing may change, low-skilled labor will still be required. So, countries
are more or less going back to the same drawing board: how much investment in
manufacturing and how much investment in the digital economy. Getting thatbalance right is the immediate priority for most of the developing Asia.

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Panelist A
I think digitalization is the main trend for the future. It's developing very fast in
China, both in terms of the breadth and depth of its coverage and depth.

Thecoverage reaches almost every area; production, commercial activities, human lives,
finance, and culture – almost everything. This trend will develop further.
One of the big effects in China is the connecting of rural areas, which can overcome
the traditional gap between rural areas and urban areas, allowing rural areas to join
this digitalization framework for selling, production, technology, and so on. This
mainly damages traditional trades, so they have to readjust. Government tax
systems and human life also have to adjust. For SMEs, it's both and opportunity andchallenge, but the challenge I think, even to some extent as a threat, is to the
traditional ways of business and so they have to adjust. In some cases, the cost isvery huge. However, as I mentioned, that's a trend we have to accept due to the
speed of technological development.
Participant B
It is quite interesting to hear that while we have to promote digitalization, there aresome negative aspects of digitalization that we have to overcome. What are yourviews on the negative aspects of clean energy promotion, and how can they beovercome?
Moderator
I will first get all of the questions.
Participant C
I have some comments and a question. I would like to raise four issues that need tobe considered when it comes to the digital economy and digitalization.
The first issue is the regulatory framework. I fully agree that a rules-based approachto the digital economy is important. China has seen rapid development of its digital
economy recently, but of course, it has also encountered some critical matters thatneed to be tackled. The first is data security, the second is inclusive andnondiscriminatory policy on the part of large companies, the third is the protectionof vulnerable individuals, because China has seen many vulnerable individuals
losing a lot of their wealth because of this P2P online credits or online loans, and thefourth is how to balance this encouraging innovation while regulating monopolies.
While in the early stages of the development of digital economy there should be13

sufficient freedom for startups and different tech companies to develop, we have toprevent the trend of these big companies become monopolies in the industry.
The second issue is infrastructure. The development of the digital economy heavily
depends on infrastructure. China benefits a lot from lower rates for broadband andmobile phone fees, and this is the basic infrastructure for utilizing the ICT technology,
especially now when it comes to introducing 5G technology. This is going to beanother big push in the development of digital economy. 5G probably has done wellin Korea, and China is also trying to catch up.
The third issue is logistics. With e-commerce, we need to have very efficient, effective
and cost-efficient logistics.
The fourth issue is the flow of capital. How to regulate cross-border capital flows andtransactions potentially needs to be considered. In addition, how to coordinate thepolicy of different countries in terms of taxation in the economies of the region is alsoa pertinent issue.
I would like to know about infrastructure and regulatory framework in othercountries. The digital economy is still at an early stage of development, so we needto have a lot of effective discussions in consideration of an overall regulatory
framework for the Asia-Pacific region to make sure it is conducive to the developmentof region’s digital economy.
Panelist D
I would like to respond to what was said about the negative aspects of thedigitalization. Myanmar is an LDC. 67% of the population live in rural areas and are
not well educated. These people need jobs, and they don't have the capacity to learn
about digitalization or such things.
Because Myanmar is an LDC, for trading and services, digitalization works.

But

the local ecosystem needs to grow more because there is a high level of superiority
in the surrounding countries concerning digital issues. But for the manufacturingsector, 60% of MSMEs are in the food industry. They don't have the money to invest
for the technology, they still use manual workers. Digitalization is good in some
aspects for Myanmar, but there is a lot of unemployment and half of the population,
more than half are young women in the rural areas, so we do need manual work.
Digitalization is good, but we cannot make it our only focus. The investment, thetechnology, the capacity, all of these are still a big requirement for the country, andwe need to provide jobs to those from the rural areas and who want to migrate to therural areas.
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Panelist B
I would like to provide a couple of comments on digitalization.

While the pandemic

accelerated digitalization, it also really created a digital divide, especially in Korea.
Microbusiness is still really at the infant stage of digitalization, so we need to pay
attention to how we can ensure the microbusiness goes digital.

The second issue isthe substitutability of digitalization for labor. In Korea, I was really surprised that
untapped industries suddenly mushroomed, especially delivery services. I think
digitalization can also create new job opportunities, while making progress on thedigital service-ization of your economy.
Panelist E
I have three observations. Firstly, before Covid-19 in Vietnam, digitalization createda lot of jobs rather than unemployment pressure because people could use manydifferent platforms for doing business, creating millions of jobs.

After Covid-19,

digitalization creates unemployment pressure because firms changed their way of
doing business from contact to contactless.

Overall, it has made a positive

contribution by keeping firm in business.
Secondly, the informal sector is a problem. We tried to provide social support topeople, but actually accessing employees in the informal sector was difficult.

I

think ASEAN and Asia should focus more on social security systems, anddigitalization can help.
Lastly, the new energy sector. Vietnam has an advantage in developing solar andwind energy, but faces two problems.

One is policy, because technology changes

quickly, you cannot keep the appropriate policy with a change in technology.

The

second is the need to have a very systematic approach in developing the solar, wind,and new energy because you need to have a grid system to suit the electricity
generation.
Moderator
Thank you so much for having had a good discussion. I would especially like to thankthe panelists and the discussants for contributing excellent material to our
discussion.
Without drawing any conclusions, it seems everybody agrees that in order to promote
or strengthen resilience of global supply chains, we need some sort of rule-based
trade and investment regime.
I would like to add that we need some sort of evidence-based policymaking process15

to be applied to important policy decisions for digitalization and green growth.

Session 2: Economic Integration and Trade System of Asia PacificPanelist A
The panelist states that nowadays the world is facing major challenges to its
economic growth. The key factors to address the situation are firstly, adhering to themultilaterally-agreed rules of the road, which enable the market to operate as freely
and as fairly as possible. Secondly, using the long-standing consultative mechanisms
such as ASEAN, APEC, which will be more important than ever so that smaller andmedium sized countries have an ability to raise concerns in a multilateral context.
Thirdly, adherence by signatories to the high standards set down under CPTPP and
RCEP will also be important - especially if additional signatories to these agreements
are accepted. Fourthly, while the CPTPP and RCEP include new rules not coveredby the WTO, much more needs to be done to develop rules to reflect and manage therapid changes occurring in the digital economy. Fifth, continued peace and stability
in the Asia Pacific remains paramount to ensure ongoing economic prosperity.
Panelist B
The panelist says that lots of issues that need to be considered to achieve sustainable,
resilient, inclusive, and dynamic economic growth. One of the most important factors
is to establish and manage a free, open, transparent, rules-based economic/businessenvironment, which will facilitate international/regional movement of goods,
services, data/information, and people, contributing to expansion/ intensification/
diversification of GVCs. For developing countries, the speaker believes that economic
cooperation/assistance from developed economies is necessary. While for developed
economies, they are supposed to provide economic assistance (trade adjustment
assistance) such as temporary income compensation, human resource development(education and (re)training, digital skills) and the development of SMEs for theirown countries as well as for developing countries.
Panelist C
The panelist states that more rules are needed on the field of digitalization, which
has been booming during the pandemic and has much promise. For example, signing
Digital Economy Agreements (DEAs) with other partners, will be helped to address
16issues and be potential pathfinders. Secondly, sustainability and carbon: There are
economic and trade issues that arise from the increased attention and commitments
to climate action. There may also be concerns over the effects of Carbon-Based
Adjustment Measures (CBAM) proposed by the EU or other carbon leakage policies
set by our non-Asian trade partners. At the same time, opportunities for cooperationarise and Green Economy Agreements be another path-finding effort. Thirdly,
bilateral initiatives: The economic ties with other regions like the EU and with the
Pacific Alliance in Latin America will be of importance. In themselves they areimportant and with Sino-American tensions. In this regard, what had been seen issomewhat like the bilateral FTAs in the early 2000s that then were expanded into
ASEAN-wide agreements. As they progress, these can later be open to more partners
and also integrated into economic trade and investment agreements.
Discussant A
We should not pass over “rules-based” with too little deliberation. “Rules based”
should not be interpreted as a single unchanging set of rules. We must always expect
innovation and change to pose challenges to existing rules. There is no international
authority to create and enforce rules across the sphere of economic cooperation.
Rules are “legally binding” if their rupture would be embarrassing andembarrassment usually comes at little cost. No single economy can impose rules on
the international system with any degree of validity. International rules have to benegotiated and agreed. They will inevitably prove to be inadequate in the face oftechnology and other changes. So the maintenance of rules, as much as theformulation of rules, has to be a matter of negotiation and agreement. “Rules-based”
has to be understood as “relationship-supported”.
Discussant B
There are some key issues that need to be addressed in the area of digitalization.
The first one is rule-based competition. Secondly is labor security and protection.
Thirdly, we are also supposed to pay more attention on data access, privacy andsecurity issues. Meanwhile, regional cooperation must be strengthened in order tobetter address cross-border issues and challenges.
Discussant C
We need some soft approaches like having arrangement on SMEs. Digitalization has
potential to divide the region, but it also has the ability to facilitate the region
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economy activities. It is important that we work with the digitalization, collaboration,
cooperation within the region, because each region would be a part of the chain, thethird point the speaker would like to talk is SMEs, every countries in the region
depend heavily on SMEs, yet they have been very little integration approach on
SMEs, the CPTPP has got very good chapter on SMEs, we need to consolidate on thisand have a real collaboration on SMEs, so that SMEs can be very resilience. Let
SMEs to be a tool for greater economy integration within the region.
Discussion
1. I would like to discuss on SMEs issues, I do agree with all the comments. Secondly
for the political issue, I have some experience in Japan in formulating SMEs policies,
all political parties they support SME. Because of the political influence that SMEs
have, 99% Japanese firms are SMEs, but 70% employees they work for SMEs, so
supporting SMEs, you get the vote. I think what is needed is to promotecompetitiveness of SMEs, that is the way that we achieve economy goals
2. I want to ask a question. In the first session I indicated that it is important thatthe membership expansion at the CPTPP, but what is the entry criteria for the
existing CPTPP member to decide which country would be accepted or rejected. I
know the existing member can access those countries who wants to join?
3. I think we must be open about the idea I mentioned how digital economy might bedifferent? We look a way to integrate the issues into our existing trade tides, butthere are so little about digital economy before. I think digitalization is new factor
that deserve attention, which would also be very important for economy integration.
As for this, I do want to know the American initiative, I don’t know whether people
should be open to discuss on some elements like investment, digital or other elementsof cooperation with them.
Closing Remarks
Masakazu Toyoda
The speaker expresses his gratitude to the moderators and the participants in thediscussions. He notes that he found it interesting to hear about the negative aspects
of digitalization in the first session, but that these shouldn’t stop this important
movement.
Finally, the speaker reiterates his gratitude for the insightful discussion today.
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The concluding remarks A: while many positive signals have been captured from the
speeches of experts, and of course there are also problems. She believes what the
keynote speech suggested that speeding up the establishment of an Asia-Pacific free
trade area is a very important main stay and the path choice. Besides, in order topromote an open Asia-Pacific economy, while advancing a high level of openness, itis necessary to consider how to include low-income countries, developing countries,
low-income groups, and small and medium-sized enterprises. Finally she states thathope the Asia-Pacific Forum will continue to play an important role on theseimportant topics.
The concluding remarks B: The discussion was interesting to hear some negative
perspective about that, but those negative aspects should not stop those important
movement, the most important thing is how to overcome those negative aspects andmaximize the benefit of digitalization, green energy etc, and it is important that welearn from each other in Asia-pacific region. For the second session, everybody agree
that the rule based competition is very important, but there are still some limitations
to overcome to move further liberalization, perhaps the soft approach might beimportant and I say not only ASEAN country, but also Asia-Pacific region need towork together for the world economy.

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