Lima, November 16, 2016 – A retreat into protectionism and inward looking policies is
not a solution to the economic problems the region faces, business leaders
meeting in Lima for the APEC Business Advisory Council said yesterday.
“Regional economic integration can be made to work better and
its benefits more obvious. If governments adopt policies which enhance the
capacity of economies, their communities and people will be better able to take
advantage of more open and competitive markets.”
“In the face of growing public disquiet about the impact of
freer trade and investment, business leaders are concerned that many
governments are looking to impose new tariff and non tariff barriers,” said
Juan Raffo, ABAC Chair for 2016: “Protectionist actions make it harder for
business to play its part in creating employment and raising living standards
across the region”, said Raffo.
“Brexit and recent election results in both developed and
developing economies seem to have served as a referendum on the merits of
economic integration. They have created an unprecedented uncertainty about the
direction of the global economy. They appear to call into question the
successful model of economic integration that has been responsible for rapid
growth and the spread of prosperity around the world,” Raffo added.
“We accept the need to do more to help convince our citizens
that economic integration is directly linked to expanding prosperity and that open
markets - enhanced by new technologies and ways of doing business - have lifted
millions out of poverty. Yet we also know not everyone has shared equally in
this dividend and many feel left behind. While social safety nets can provide
temporary relief and assistance in adapting to the new circumstances, it is
structural economic reform that can address any negative consequences on a
longer term and permanent basis.
“Sound policy and regulatory quality will enhance the ability of
business – both large and small - to make the most of opportunities for all that more open trade
and investment generate. This will also spur new sources of growth such as in
the services sector, raise productivity and promote innovation benefitting all
sectors of our society,” said Raffo.
“Since 2004 we have been promoting a
high quality, comprehensive and ambitious Free Trade Area of the Asia Pacific
(FTAAP) as a means to achieve reforms both within economies and beyond borders.
We are disappointed that progress of the pathways towards FTAAP - ratification in the case of the Trans-Pacific
Partnership (TPP) and completion of the Regional Comprehensive Economic
Partnership (RCEP) – has slowed,” said Raffo. "We are, however, encouraged by the completion of the APEC
Collective Strategy Study. It will position APEC to set some ambitious targets
for FTAAP with a future timetable and further concrete actions.”
ABAC has always placed great importance on the role of smaller
businesses in driving entrepreneurship and employment in all APEC economies.
Expanding the participation of micro, small and medium enterprises in global
markets will help achieve quality growth, more jobs and highlight the benefits
of globalization. ABAC will put to Leaders a number of initiatives to promote
MSME access to global markets, new technologies and finance, as well as
empowering women and young people.
The services sector is the single biggest contributor to
employment (46%) and output (70%) in the APEC region as well as enabling
significant participation by MSMEs and women. ABAC will discuss with Leaders
the importance of more coherent, transparent and efficient regulatory environments
which support the growth of the services sector and that keep pace with the
dramatic changes in the way that business is conducted.
ABAC will engage Leaders in a discussion about connectivity, in
particular the transformative effects of the digital economy and its
contribution to GDP growth around the region. ABAC recognizes that as economies
adopt digital strategies, there is an opportunity to contribute to inclusive
growth. However, efforts must also be taken to address infrastructure needs,
capacity building and skills development.
ABAC members will also discuss with Leaders their detailed
recommendations on promoting sustainable development, food security and
building larger, robust and inclusive financial markets – all of which are
fundamental to sustained and inclusive regional growth, concluded Raffo.