Thursday 16 June - 1215-1315

As economic and trade agreements create complex overlapping jurisdictions, and competing maritime claims continue to stoke tensions, what are the prospects and risks for deepening economic integration in the Asia-Pacific?

In the Asia-Pacific, tensions over competing territorial claims in the South China Sea are mirrored at a geo-economic level by a host of economic and trade initiatives such as TPP, One Belt One Road, the ASEAN Free Trade Area and RCEP.

These initiatives are creating overlapping jurisdictions and rules, which could undermine the pace of regional and global economic growth. What are the prospects for deepening economic integration across the Asia Pacific in this context? How do policy-makers and businesses perceive the risks and opportunities?

Session Report

The panel debated the merits of business versus politics, and examined the political tensions in the Asia region, notably around the influence of both China and the US. The importance of trade negotiations and deals can play a vital role in ensuring political stability, especially when looking at how the US and China are building various alliances with each other.

However, there remains concern that the risks of a political crisis are high, especially around the South China Sea, and the panel also examined reasons why so many different trade agreements exist (bi-lateral and regional), and why the US and China often negotiate different agreements to each other.

The importance of developing a hedged interdependence in order to make conflict economically impossible was also touched upon, and that the emergence of a "Chinese Dream" in terms of its strategic interests means that everything is now seen through a political lense.

Using international law within the region to settle disagreements could be vital but the rise of nationalism, as well as the importance of public opinion, does mean new factors are beginning to impact on both economics and politics. 

Speakers

Key Quotes

'We are betting very heavily long-term, in the end, on economics trumping politics. But we are not blind to the risks. We look at Asia as a long-term huge opportunity and we see this patchwork of new agreements as paving stones on a way forward to greater prosperity for Asia. But as always in human history, the flag follows trade, and so these two things need to be kept in parallel.'
Sherard Cowper-Coles

'Everyone wants a path or channel that suits the country best. Believe in the spaghetti bowl of trade agreements, they all work. Business people will use the trade agreement that works best for them. Economic co-operation has been going on for a long time and China has been very active in my region with all the ASEAN countries. Now because of strategic interests, and because China has put out a vision - the Chinese dream - everything in economics is seen through a pair of political lenses.'
Chan Heng Chee

'We support a peaceful, strong China. The US and China are the two largest economic powers in the world and they will continue to be for the foreseable future. And so we think it is important to use every avenue in which to engage in building that relationship. I think our work around climate change shows that we can take on not only immediate challenges but fundamental systemic challenges that will affect people in both of our countries and globally for the long-term.'
Robert Holleyman