Informal Apec offers nimble trade opportunities
The informality of the Asia Pacific Economic Cooperation forum (APEC) gives nations greater freedom to navigate some of the thorny issues facing trading nations as the tide of globalisation goes out in some developed economies, says APEC secretariat head Alan Bollard.
Delivering Victoria University's annual Sir Frank Holmes Memorial Lecture in Wellington last night, Bollard told the audience the APEC secretariat views merchandise trade as being at a peak with traditional trade patterns shifting as countries like the US bring more production home and China moves work into its less developed western regions. That implies trading in goods will only increase at the same pace as economic growth.
However, trade in services will continue to expand as new technology becomes cheaper and more mobile, undermining territorial boundaries and benefiting from growing demand from a bigger middle class, he said.
Bollard, a former Reserve Bank of New Zealand governor and Treasury secretary, said there was a lot of "turbulence in trading arrangements" in an environment where there was a "lack of faith" in the World Trade Organisation, and that the APEC leaders meeting in Vietnam in November may provide an opportunity for discussion of a clearer trade agenda.
"Trade facilitation is terribly, terribly slow. In that context, APEC offers more opportunities in the sense that, in a difficult world like that, APEC isn't a legally constituted, legally binding, dispute-resolution based organisation. It's just a bunch of economies that come together," he said.
Bollard's lecture, called 'Disruption: Some Big Changes in Asia-Pacific Economic Integration', noted declining productivity rates across Asia-Pacific since the global financial crisis, which he said wasn't just a New Zealand phenomenon. Many nations are grappling with measurement issues, reduced trade and investment, the diffusion of technology, and ageing populations.
APEC is watching those trends closely, but anticipates the rapid rise in services trade will continue to support globalisation, he said.
Bollard said one emerging issue is where Chinese firms such as Baidu, Ali Baba and Tencent are lined up against their American counterparts Facebook, Amazon and Google with no shared set of standards for maintaining the openness and accessibility of online platforms. APEC wants to prevent one system "trying to colonise platforms" so that electronic commerce benefits not just consumers and governments, but also opens international markets for small businesses that had previously not traded across borders, he said.
Local software firm Xero has been a champion for small businesses to enter international markets and has been positioning itself away from simply an accounting software developer and into an online intermediary between businesses and financial services firms.
New Zealand's annual goods exported totalled $50.05 billion in the June year, up from $49.21 billion a year earlier, while services exports of $21.94 billion increased from $21.54 billion in the June 2016 year.