DEEPER RE­GIONAL TIES URGED FOR TRADE BOOST IN RE­GION

CLOSER CO­OP­ER­A­TION, LOWER TRADE COSTS VI­TAL FOR SUS­TAIN­ABLE DE­VEL­OP­MENT: ESCAP

The Nation - - BUSINESS -

THE TRADE out­look for the Asi­aPa­cific re­gion is pos­i­tive for this year but some un­cer­tain­ties are fore­cast for 2018, the United Na­tions Eco­nomic and So­cial Com­mis­sion for Asia and the Pa­cific (ESCAP) said in its an­nual trade and in­vest­ment re­port.

The re­port en­ti­tled, “Chan­nelling Trade and In­vest­ment into Sus­tain­able De­vel­op­ment” em­pha­sizes that cut­ting trade costs and deep­en­ing re­gional co­op­er­a­tion are key to en­sur­ing the ben­e­fits of trade and in­vest­ment can be shared across the re­gion.

Such pol­icy mix may re­sult in US$100 bil­lion more ex­ports for the re­gion an­nu­ally. Ex­port growth is fore­cast at 4.5 per cent for 2017 and for­eign di­rect in­vest­ment is also ex­pected to re­bound this year, build­ing upon fast growth in green­field in­vest­ment in 2016 and con­tin­ued in­vest­ment lib­er­al­i­sa­tion, ac­cord­ing to ESCAP's flag­ship pub­li­ca­tion.

Launch­ing the re­port in Bangkok, United Na­tions Un­der-Sec­re­tary- -Gen­eral and ESCAP ex­ec­u­tive sec­re­tary Shamshad Akhtar said that an in­te­grated ap­proach to trade and in­vest­ment lib­er­al­i­sa­tion is es­sen­tial to achiev­ing the Sus­tain­able De­vel­op­ment Goals (SDGs) in the re­gion, but that SDG- tar­geted trade and in­vest­ment poli­cies and com­ple­men­tary do­mes­tic poli­cies need to mit­i­gate the so­cial and en­vi­ron­men­tal im­pacts of trade and in­vest­ment.

“The im­pact anal­y­sis of dif­fer­ent pol­icy sce­nar­ios fea­tured in the re­port make it clear that SDGs can­not be achieved through pro­tec­tion­ist poli­cies,” Akhtar said.

“What we need is tar­geted trade and in­vest­ment lib­er­al­i­sa­tion poli­cies that are more in­clu­sive and mind­ful of the so­cial and en­vi­ron­men­tal di­men­sions of sus­tain­able de­vel­op­ment.”

The re­port noted that the ex­pected growth of ex­ports by de­vel­op­ing Asia-Pa­cific economies is 4.8 per cent while that by de­vel­oped coun­tries in the re­gion is 3.3 per cent. Coun­tries pre­vi­ously af­fected by the slow­down of global value chains, such as South Korea and the Philip­pines, are ex­pected to en­joy sig­nif­i­cantly bet­ter trade prospects this year.

At the same time, the ris­ing prices of in­dus­trial commodities and fuel will con­trib­ute to dy­namic growth for com­mod­ity ex­porters such as Aus­tralia, In­dia, In­done­sia, Iran, Kaza­khstan and others.

The study also an­tic­i­pates that the ex­port vol­ume of Asia-Pa­cific re­gion in 2018 will grow more mod­estly than in 2017 at 3.5 per cent while the im­port vol­ume will in­crease by less than 3 per cent.

Ex­port and im­port prices, es­pe­cially com­mod­ity prices, are not likely to in­crease, and in fact, may trend down­ward due to the po­ten­tial slow­down of in­vest­ment and con­sump­tion pre­cip­i­tated by ris­ing un­cer­tain­ties.

The slug­gish prices will cause trade value in 2018 to grow much slower than in 2017. At the same time, deep­en­ing un­cer­tain­ties may also af­fect the ex­tent of in­vest­ment lib­er­al­i­sa­tion which is found in­creas­ing GDP by US$19.5 bil­lion an­nu­ally, while de­creas­ing in­equal­ity in the re­gion by 0.02 per cent per year.

The re­port pro­poses a pol­icy frame­work to fur­ther en­hance the con­tri­bu­tion of in­ter­na­tional trade and for­eign di­rect in­vest­ment to sus­tain­able de­vel­op­ment.

It also pro­vides es­ti­mates of the eco­nomic, so­cial and en­vi­ron­men­tal im­pacts of al­ter­na­tive re­gional trade and in­vest­ment lib­er­al­i­sa­tion pol­icy sce­nar­ios, when im­ple­mented alone or in con­junc­tion with se­lected do­mes­tic so­cial and en­vi­ron­men­tal poli­cies.

A strong mes­sage from the re­port is that in­te­grated lib­er­al­i­sa­tion in­creases trade and GDP sig­nif­i­cantly more than any of the other stand­alone pol­icy changes.

This in­te­grated ap­proach fa­cil­i­tates the par­tic­i­pa­tion of coun­tries in global value chains and sig­nif­i­cantly in­creases the com­pet­i­tive­ness of re­gional ex­ports.

This in­te­grated lib­er­al­i­sa­tion sce­nario pro­vides strong ev­i­dence of the im­por­tant syn­er­gies that can be achieved by lib­er­al­is­ing and fa­cil­i­tat­ing trade and in­vest­ment.

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