MULTILATERALISM, REGIONALISM, BILATERALISM WHAT WILL BE THE ASIAPACIFIC CONTEXT FOR NEW ZEALAND

1
MULTILATERALISM, REGIONALISM, BILATERALISM
 WHAT WILL BE THE ASIA-PACIFIC CONTEXT FOR NEW
ZEALAND

• Presentation to
• Asia Forum
• Wellington, 27 May 2003
• By
• Gary Hawke
• Chair, NZPECC, and
• Head of the School of Government, VUW

2
PECC

• six-monthly meeting of the PECC Standing
  Committee Washington DC, 22-4 April.
• Seminar of the PECC Trade Forum on Regional
  Trading Agreements
• inaugural meeting of the Asia-Pacific Council of
  the US,
• major speeches from Secretary of State, Colin
  Powell, and USTR, Bob Zoellick.

3
Fred Bergstrom

• IIE APEC EPG - adviser to Administration.
• Competitive liberalization.
• RTAs and the multilateral process
  complementary, mutually supporting and if
  properly managed, catalytic.
• Doha and FTAA are now on a timetable that ends in
  May 2007 RTAs provide main action in meantime

4
Fred Bergstrom cont.

• East Asian RTAs driven less by co-operation than
  by conflict between Japan and China. less likely
  to proceed to multilateralisation?
• RTAs as the 4th attempt to find a strategy to
  implement the Bogor Goals?
• On this analysis, the Asia-Pacific context for NZ
  will be reasonable pressure to co-operate in a
  WTO round but with a relaxed timetable until
  2007, and a need to manage a process of RTAs
  designed to speed up and go beyond the
  multilateral process.

5
Robert Zoellick

• Background
• Administrations success with Chinas accession
  to the WTO while not unaware of problems,
  generally positive about its subsequent
  implementation
• Russia and Vietnam accession on timetables they
  decide.
• focus in the multilateral area is on market
  access
• regional priorities are FTAA, ASEAN, and the
  Middle East.

6

• The bilateral agenda is
• Singapore and Chile, where negotiated FTAs await
  submission to Congress,
• Central America,
• Morocco,
• South Africa and
• Australia.
• Zoellick knows the dangers of bilateralism, but
  is not willing to proceed in the WTO only when it
  is subject to veto by every member
• Whatever was the case in the 1980s trade policy
  now will not be decoupled from political goals
• APEC has the interesting feature of involving
  business - it is a post Cold War economic
  institution

7
Colin Powell

• an adviser to a president with a vision of a
  world at peace, using all the tools at his
  disposal for that purpose, drawing on the best
  possible advice all his advisers can provide, and
  making the decisions he has been elected to make.
  
• Asia versus Europe? it is both diplomatic and
  true that both are important, but in the 21st
  century the correct answer is that all big issues
  are global.
• The Asia Pacific Region acknowledged as having
  participated in the war on terrorism, in finance,
  travel, intelligence, and agreements in APEC.

8
Colin Powell cont.

• There is no reduced US commitment to the Region,
  including Korea and China Powell is impressed by
  Chinas willingness to assist on Korea and
  reflected on how far the relationship has changed
  since the Hainan Island incident.
• Differences of Perspectives to be mediated, but
  New Zealands problem is that it is seen to deny
  the morality of the US vision.

9
RTAs

• Does their liberalizing effect for members
  outweigh the damage they do to the multilateral
  system?
• pragmatism versus principle? proponents of
  liberalisation will use RTAs

10
RTAs cont.

• Assessments of 38 agreements.
• mostly promote welfare of the members, especially
  small members
• expansion to new members usually benefits
  existing members (but may not when enlargement is
  outweighed by dilution of preferences as could
  happen for Canada and Mexico)
• ins gain while outs lose, which is especially
  concerning for Australia, New Zealand and Taiwan
  in relation to East Asia, and
• it is possible that there are positive effects
  from new age elements of RTAs and from
  productivity growth.

11
RTAs cont.

• Rules of Origin impact exaggerated? Main danger
  may be use as protectionist instrument.
• Diversion including investment and more
  generally through information flows the
  international economy worth considering may come
  to be those economies which have the stamp of
  approval of an RTA.

12
Preferentialism and Reciprocity

• RTAs, not FTAs politicians can fool themselves
  and others with language
• How important are they? Tariffs WTO process.
  Peaks, and cascades. Access for services,
  conditions of investment. NZ and US-Aust.
• Case for free trade. World income is maximised
  when there are as few constraints as possible on
  the allocation of resources to their most
  productive use. National boundaries are
  constraints on the allocation of resources and
  therefore world income is maximised by minimising
  the effect of national boundaries

13
So why RTAs?- slow pace of WTO- anxiety
about markets and desire for assurance of
political control

• APEC and Alcoholics Anonymous

14
APEC

• Failure?
• Cf GATT in 1961
• Politics of APEC meetings of leaders. But still
  real economic significance.
• Economic integration, not reciprocal exchange
  of concessions among national economies.

15
Business and economic policy

• more mature understanding of relations between
  business and governments?
• Lobbying, but mere access to powerful
  office-holders will often not be the best way to
  influence policy decisions.

16
Business and economic policy cont.

• The intellectual effort of developing knowledge
  and considering how to use collective decisions
  to benefit communities is an essential component
  of influencing policy.
• So is capacity to engage in the economic
  integration which provides business opportunity.
  Economic and technical co-operation is not a
  concession but a central element of economic
  integration.

17
The main story

• US political system, US policy vision key to
  the Asia Pacific context
• Context will be slow progress of WTO to 2007,
  action on regional and bilateral front which
  could be either beneficial or disastrous for the
  world economy and for New Zealand.
• Main game remains economic integration.
• For which APEC and therefore PECC remains
  important. International economic policy requires
  mutual understanding of business, community and
  government. There should not be a gold rush to
  any particular RTA

18
(No Transcript)