Trade, not aid, is the key driver for development, prosperity and opportunity for people of our region. We can set Sustainable Development Goals, provide important aid and assistance, and write any number of government policy papers but the reality is that we won't get development without a central role for the private sector, including businesses that trade with the region and the world.
This is a statement that might have been controversial in decades past and in many parts of the world but it is no longer controversial. It is an observation of the present era, at least in the Asia Pacific region. We live in the Asia Pacific Century, built on trade. If we have learned anything in recent times, though, it is that if trade liberalisation is to continue we will need to work harder to sustain a public consensus on the value of openness and international cooperation.
If we are to maintain such a consensus the first thing we could do is drop the jargon around trade, the acronyms, TPP, RCEP, RECI, the noodle bowl of trade agreements and indecipherable terminology of trade facilitation and so called "harmonisation." The arcane language of trade is fine for bureaucrats but does nothing to convince the general public of the benefits from international economic cooperation.
We need to find a more approachable way to talk about what trade and investment really means and how international economic cooperation benefits people, communities and nations.
In the Asia Pacific at least most people are not fretting about globalisation or rushing towards simplistic answers to the challenges of growth, unlike in Europe and America. In the Asia Pacific we only need to open our eyes to see the benefits from trade and investment. East Asia, in particular, has become the growth engine of the world. As a result of trade and economic engagement with global markets, the lives of hundreds of millions of people have been transformed with better paid work and as a result of growth governments have been able to invest in better education and better infrastructure.
Asia has benefited from the trends underlying globalization such as flows of foreign direct investment, access to knowledge and innovation, open markets for trade in goods and services and rapid technological progress. We should not forget Asian growth has also been built upon the foundation of prevailing regional peace, security and stability offered by regional and multilateral cooperation.
The growth of East Asia can assist other regions that have not yet benefited as much from trade and investment.
There is an opportunity, for example, for the small island states of the Pacific to think regionally and to build greater economic cooperation with the broader Asia Pacific region. Individually they are small and remote from major markets. Together, however, the Pacific Island Countries have rich regional resources that hold great promise if we can add more value locally and integrate with major markets. Examples of the Pacific region's potential competitive strengths include the vast but finite fisheries resources, deep sea minerals and of course the potential for a regionally-connected tourism industry with future air and sea links that will traverse and benefit multiple countries.
As we pursue development through regional initiatives we need to ensure the benefits of economic integration are shared, that the trade liberalisation, harmonisation and other measures we pursue are not just resilient in the face of pressure from populist politicians but also genuinely improve opportunities for people in all corners of the region. And that the development is genuinely sustainable.
There is no doubt some trade agreements that have taken scores of negotiators years to resolve have resulted in marginal benefits. Others have had broad-based transformational impact, such as the China Australia Free Trade Agreement, an agreement between two highly complementary economies in which each has what the other needs. As a resident of Beijing, I have been a beneficiary of the 50% increase in Australian wine exports to China in the last year!
But not every negotiation is evenly balanced. In the recently concluded trade negotiations in the Pacific between the developed economies of Australia and New Zealand and their neighbouring Pacific Island Countries, all of which are developing nations, there were some who questioned that the benefits of the so-called PACER Plus agreement would be fairly distributed. These were negotiations after all, and there will always be give and take according to the national interests of each negotiating partner. If, at the end of the day, though, a national government cannot say the outcome is in the interests of their population, then there is a problem. And the whole region is not yet convinced, with the two largest developing economies of the Pacific, Papua New Guinea and Fiji, opting out.
When we think about regional and global trade, there is an understandable focus on trade negotiations to reduce tariffs and other hard barriers to trade, but non-tariff harmonisation measures to reduce the regulatory barriers to trade can also help. Again, we need to do better in explaining the benefits of this work to governments and to the public.