While Asia has been an exporting powerhouse for decades, it has not been particularly focused on buying and selling goods and services to neighbors. This is changing. One thing that is missing, however, is a structure to manage an evolving economic landscape for Asia. The existing institutional arrangements do not suit a future order very well. There are only two organizations that might play a role: the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC). The former consists of 10 countries in Southeast Asia while the latter includes 21 members, many of whom are not in Asia. However, 16 countries have spent years working on a trade arrangement for Asia: the Regional Comprehensive Economic Partnership (RCEP). The 16 member governments (Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam) are struggling to complete negotiations on the FTA for November. The stakes for RCEP are greater than most participants imagine. If the world is, indeed, watching a new “Berlin Wall” moment, RCEP is likely to become a critically important part of the new world order. It is the only readily available platform for managing trade and economic issues in Asia.
But as Søndergaard suggested, data is not like oil. For one thing, oil doesn’t go anywhere. It sits in the ground until it is brought up and used. It can be used all at once or just some at a time while the rest remains waiting. Oil can be stored forever (or at least for a very long time) without significant problems. Data, by contrast, is like an avocado. It has a clearly defined shelf-life. Data collected and used too early is pointless. Data harvested too late is often of no use at all. Søndergaard’s company runs what is billed as the world’s largest online wine marketplace. In his business, it does no good at all to rate a wine that does not exist as all the stock is gone or to recommend a wine to a customer that has already purchased something to drink for dinner. What matters is knowing what is needed in the moment when the information is “ripe.”
Policymakers should not assume that MSME firms will always stay MSMEs. Yet frameworks in many economies seem designed to trap smaller firms into a set category and entrench them into a “small” mindset. There will always be MSME firms. They form the backbone of most economies, as much as 97 percent of companies across Asia, employing the overwhelming share of workers. The goal of MSME policies should be enabling the current crop of smaller firms to grow, allowing firms in the “medium” category to reach large scale in relatively short order, while encouraging new entrants to the MSME ranks. Trade policy is one tool to help MSMEs grow. In most economies, the domestic market alone can be too small or even too competitive for success. E-commerce and digital technology, however, have allowed MSMEs to reach regional or global audiences.
After a long and arduous path, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement is ready to enter into force on December 30, 2018! Six member states have completed ratification procedures to allow the entire agreement to begin before the end of this year: Australia, Canada, Japan, Mexico, New Zealand and Singapore. This means that for these six members, every provision in the CPTPP will enter into force on December 30. Every tariff line will be reduced or eliminated, every service and investment sector that was pledged will be opened for CPTPP companies, all new rules on intellectual property rights start, all new customs procedures begin, new provisions for competition and state-owned enterprises kick in, labor and environment rules come into force, and so forth.
Negotiations started in March 2010. The original deal was finished in January 2016 with 12 parties. When the United States withdrew a year later, many people expected the agreement to die a quiet death. However, officials persevered and fought hard to maintain the high quality of the trading arrangements. For many, this meant accepting tough provisions originally negotiated as part of a comprehensive package with 12 members. The consequences of the final agreement are important for companies. Our brand-new booklet on 10 Benefits of the CPTPP can be downloaded here. The final agreement signed in Chile pared back the commitments by suspending 19 elements, amending one provision, and clarifying the terms for two others. (For more specific details, see our revised Policy Brief 17-11a.)