Distinguished Delegates, Dear Colleagues,
Ladies and Gentlemen,
Asia and the Pacific member States have successfully overcome many crises while relying on trade and investment in their pursuit of sustained prosperity. Yet trade, and in particular, the global framework for rules-based trade, is at a critical juncture.
COVID-19 pandemic has led the world to witness the worst economic performance since the Great Depression of the 1930s, with global trade falling by 14.5 per cent and global Foreign Direct Investment (FDI) falling by almost 50 per cent in 2020.
ESCAP estimates that the Asia-Pacific region lost about $2.2 trillion in merchandize trade in 2020 based on pre-pandemic growth forecasts. Services trade has been hit even harder than merchandize trade, especially services related to travel, tourism and transport.
The region’s resilience was particularly remarkable in the second quarter of 2020. At less than 12 per cent, the contraction in exports of the region was much smaller than the historic fall seen at the global level during that quarter.
ESCAP anticipates that regional trade will rebound moderately in 2021 provided that the push towards protectionism is halted and international cooperation on curbing COVID-19 is stepped up. So, there are signs that trade and investment are already recovering in the region.
In the case of investment flows, the region remains among the most attractive destinations for FDI and has been the largest source of FDI globally since 2018.
In 2019, before the pandemic, the region captured 35 per cent of global FDI inflows and was the source of 41 per cent of global outflows. However, the performance is uneven across subregions with least developed countries and other countries with special needs facing severe challenges.
Other positive signs include continued regional cooperation in trade. I am pleased to see the signing of the Regional Comprehensive Economic Partnership Agreement (RCEP), the largest bloc involving trade and investment ever concluded.
I am also pleased to note that in the last quarter of 2020, Bangladesh and China completed their domestic ratification processes for the Framework Agreement on Facilitating Cross-Border Paperless Trade and that Mongolia also completed its accession to the Asia-Pacific Trade Agreement (APTA).
These developments show a continued commitment in the region to open borders and the recognition of the importance of trade and investment as engines of growth.
Ladies and Gentlemen,
With this background, allow me to convey the following key messages to you as you conduct your deliberations in the Committee.
First, we need to collectively reaffirm our commitments to open borders and markets, resist the temptation to take protectionist measures which ultimately will prove to be counterproductive.
Promoting trade and investment is the core element of the strategy to recover from the crisis and build back sooner, while taking due consideration of legitimate public health concerns.
Second, let us ensure trade and investment policy contribute to achieving the Sustainable Development Goals. Future agreements on trade and investment may include provisions to increase coordination and minimize disruption in trade and supply chains in times of crisis or pandemics and include strong and effective provisions in support of sustainable development.
In support of this, the secretariat organized a United Nations Initiative on Model Provisions for Trade in Times of Crisis and Pandemic in Regional and other Trade Agreements, in collaboration with WTO, UNCTAD, and the other United Nations Regional Commissions, as well as other organizations from civil society, academia and the private sector.
Over the years, our annual Asia-Pacific Trade and Investment Report (or APTIR) has always positioned trade and investment policy options within the framework of sustainable development and APTIR 2021 will be no exception, focusing on accelerating climate-smart trade and investment.
With regard to investment, the secretariat is preparing several knowledge products to help countries more effectively leverage and channel FDI into priority sustainable development sectors.
Third, let us promote digital trade and contactless trade facilitation. COVID-19 crisis has underscored the important role of the Framework Agreement on Paperless Trade as one important mechanism for regional cooperation.
The Interim Intergovernmental Steering Group on Cross-Border Paperless Trade Facilitation concluded its 6th meeting just yesterday and the Agreement will enter into force next month, so I urge all remaining member States to complete their accession processes as soon as possible.
In addition, countries can strategically harness FDI to build or expand their digital economies while also utilizing digital technologies to promote, target and facilitate FDI. In particular, policymakers must identify specific financing needs for digital infrastructure, digital business development and wider digital adoption, and develop an FDI strategy to help meet these requirements.
Fourth, we need to engage a wide range of stakeholders in these efforts, including business sector as the agent of trade and investment.
This includes the active adoption by businesses of internationally accepted standards and principles for responsible business conduct. We are proud to be the only United Nations Regional Commission to engage business through the ESCAP Sustainable Business Network (ESBN). With your support, we will continue to promote and strengthen public-private sector partnerships.
Fifth, I wish to re-emphasize the need for enhanced regional cooperation and collaboration. There is a clear case to build on and expand existing cooperation frameworks such as RCEP, the paperless trade agreement and APTA.
Importantly, the region needs more readiness to push the frontiers of cooperation and open it up for the opportunities of post-COVID-19 recovery strategies.
Ladies and Gentlemen,
We look forward to a brighter future where the pandemic can be brought under control, multilateralism can be revived, and regional cooperation strengthened.
This will help the recovery of trade and investment, on which so many people depend for their livelihood. It will take political will and enhanced regional cooperation, with the strong support of ESCAP, to ensure that the Asia-Pacific region remains a leader in trade and investment-led sustainable development.
I look forward to your stewardship as we continue our joint efforts to respond to the challenges before us — dealing with the pandemic and supporting the much-needed economic recovery by making trade and investment work for everyone.
I close by wishing the delegates from around the region a fruitful discussion in the Committee on Trade and Investment’s seventh session.
Thank you for your attention.