Opening Remarks at the Committee on Trade and Investment
Very distinguished delegates,
Welcome to the Economic and Social Commission for Asia and the Pacific and to this sixth session of the Committee on Trade and Investment. I am pleased to be with you to consider some of the challenges to free trade and investment in our region, take stock of ESCAP’s ongoing response and to set out some of the areas where, under the guidance of this Committee, more could be done.
The benefits international trade and investment have brought Asia and the Pacific should never be taken for granted. They have powered growth, lifted millions out of poverty, and established our region as an economic powerhouse. The countries you represent include some of the world’s leading merchandise and services traders. Many are considerable sources of foreign direct investment. So our region naturally took a leading role in placing international trade and investment at the heart of the 2030 Agenda for Sustainable Development.
Yet the international consensus, which for decades held free trade as a force for good, is fraying. As the world’s centre of economic gravity shifted to our region there has been a backlash against a multilateral approach to governing trade and investment. The logic of promoting “a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the WTO” is being challenged.
International trade tensions have increased to everyone’s loss. New protectionist measures will lead to a sharp slowdown in trade growth and foreign direct investment in the region. They will feed into a slowdown of economic growth. To compound matters, a variety of non-tariff measures are being used. Often opaque, these are formidable barriers to smaller businesses wishing to expand into new markets. Combined with increased restrictions on FDI, and existing concern about migration, these measures could weigh significantly on sustainable development.
At ESCAP, we have worked to ensure an informed regional picture is available for policymakers navigating a rapidly changing trade and investment environment. With this mind, we have assessed the potential impact of trade tensions and demonstrated the degree to which regional integration could be a powerful stabilizing force. Our analysis demonstrates how regional integration initiatives, such as the Regional Comprehensive Economic Partnership, would offset economic losses caused by further international trade tensions.
Facilitating regional integration lies at the heart of ESCAP’s mandate. We provide the Secretariat to the Asia Pacific Trade Agreement. Its members are about to start a fifth round of negotiations for a deeper trade and investment relationship. ESCAP member states have also recently adopted the Framework Agreement on Facilitation of Cross-Border Paperless Trade. This will support digital trade facilitation and holds great promise for increased intraregional commercial exchange.
Avoiding non-tariff measures becoming entrenched barriers to sustainable development has determined the focus of this year’s Trade and Investment Week and the forthcoming Asia-Pacific Trade and Investment Report (2019). It underpins our work with the United Nations Conference on Trade and Development to build countries’ capacity to rationalize non-tariff measures and support sustainable development. We are working with the International Trade Centre to improve data and understanding of the impact of non-tariff measures from businesses’ perspective.
ESCAP has pressed ahead with the development of online tools, such as the online Trade Intelligence and Negotiation Advisor. This can process trade and other data needed to inform positions during trade negotiations. We continue to provide technical assistance to countries with special needs in support of facilitating FDI for sustainable development. Country-specific FDI sustainability indicators are being developed to help countries prioritize FDI to achieve the Sustainable Development Goals.
Ladies and gentlemen,
As we look to the future, there are four areas on which this Committee’s guidance would be valuable.
First, to support growth and prosperity, our region needs a rules-based, non-discriminatory open trading system. For that, we need to work together to reform the World Trade Organisation. All countries in our region must be heard, very much including those with special needs. This Committee can help develop the coherent positions needed to cut through.
Second, I hope this Committee can ensure we fully exploit existing agreements to deepen trade integration in our region. The Asia-Pacific Trade Agreement and the Framework Agreement for trade digitalization in Asia and the Pacific are a sound basis for further trade integration.
Third, we look forward to your guidance on emerging issues. I have mentioned non-tariff measures, but e-commerce and more generally regulation of digital trade is a fast-growing sector which would benefit from a clearer regional approach.
Finally, there remains great potential for FDI to be channeled better towards sustainable development initiatives. How to consolidate existing international investment agreements while maintaining fundamental investor protection deserves our consideration.
I am looking forward to hearing your thoughts on all these issues. We are grateful for your continued support and cooperation. I wish you a very successful Committee.
Thank you for your attention.