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Asia-Pacific Trade and Investment Report 2011

Post-Crisis Trade and Investment Opportunities

image of Asia-Pacific Trade and Investment Report 2011

This report identifies the challenges and opportunities for trade and investment in the Asia-Pacific region concluding that with the right policies and strengthened regional cooperation, the region will be able to continue strong trade- and investment-led growth. With the continued stalling of the international Doha Round of negotiations, regional trade agreements remain an important approach to controlling protectionism. A fresh look at the rules under these agreements is recommended. The report emphasizes that governments need to step up efforts to improve the environment for business and investment.

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Post-crisis protectionism in the region

At the start of the global economic crisis in 2008/2009, there was a real fear that the sharp collapse in exports and production in many countries would lead to a repeat of the damaging trade wars in the 1930s. Fortunately, such a trade war, using tariffs as the principal protectionist tool, did not happen, although protectionism using other tools has increased (ESCAP, 2010). Contemporary or crisis-era protectionism is dominated by behind-the-border measures such as bailouts, state aids and export subsidies rather than tariffs. More recently, WTO Director-General Pascal Lamy acknowledged that while protectionism had become "the dog that hasn't barked" during the crisis, the risk of rising protectionism has not been eliminated. In fact, the continued rise in unemployment, deepening debt and incidence of other financial problems and shocks to national economies have all kept protectionism as a clear danger (Elliott, 2011). The most recent monitoring report by WTO, OECD and UNCTAD raises a cause for concern about new a number of restrictions being imposed in early 2011 (WTO, 2011c).

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