Exposición realizada por el Profesor Christopher Findlay, Vicepresidente del Comité Australiano de Cooperación Económica en el Pacífico y Decano de Profesiones de la Universidad de Adelaida, 11 de abril de 2013. Desayuno anual de la Fundación Chilena del Pacífico
Thank you for this opportunity to discuss some important developments in our region, in particular, the emergence of what might be called mega-regionalism.
Let me explain what I mean by that phrase, identify the origins of the phenomenon and discuss a few aspects of its implications, as well as talk about how the mega-regionalism game might play out.
WHAT IS MEGA REGIONALISM?
By mega-regionalism I mean not only the new multi-country trade agreements in the Asia Pacific but also the extent of interaction between them.
We have had some multi country agreements (rather than having just two countries involved as in a bilateral) for some time, like that around ASEAN and another around North America.
But the change has been new structures like the TPP, now with 11 members across the Pacific, and the Regional Comprehensive Economic Partnership of RCEP which is the ASEAN + 6 group in East Asia and includes NEAsia, Australia, NZ and India.
So compared to others, these newer agreements have a wider geographic coverage, and membership is not limited to economies which are next to each other.
This audience is more likely to be familiar with TPP, of which Chile was a founding member, and less so about RCEP, so perhaps today that is one point of interest.
WHY HAS MEGA REGIONALISM GROWN
Where did the interest in these newer multi country structures come from? Factors include
* The economics of larger membership--trade agreements with bigger membership generate much greater gains for each participant. This does depend on the size of the trade barriers being reduced, the complementarities among economies in the group and their size but there is a positive link to larger membership.
* The growth in interest in the concept of supply chains, based on the fragmentation of production, and wanting to have a policy environment that supports their growth across a group of countries (bilateral agreements are not enough--they maybe inconsistent and offer insufficient coverage)
* The growth of bilateral agreements itself has added, it is argued, to complexity and to costs of doing business which we have sought to ameliorate by wider membership agreements.
There is also an interest in making greater progress on new issues, like regulation and competition and SOEs, as traditional trade barriers--while significant in some areas--decline overall.
Also there is some experience that dealing bilaterally is very hard (look at Australia's efforts in NEAsia) so having more countries with more change going on creates more scope to reach a deal that can be sold to domestic political interests. At least, that might be the hope.
Some of these points beg the question of why not, if bigger membership is better, go to the WTO, which has global membership. The WTO has a vital contribution in this context of mega-regionalism--more on that shortly--but proponents of these new structures would probably say that more members are better, yes, but there are...