28/11/2016 ASIA-PACIFIC TRADE AND INVESTMENT REPORT 2016 Recent Trends and Developments Launch UNCC,29 November 2016 Presented by Susan F. Stone, Director, TIID Asia-Pacific Trade and Investment Report 2016 • Annual flagship publication of ESCAP’s Trade, Investment and Innovation Division. • Comprehensive assessment of recent trends and developments in regional trade; FDI; trade policy; trade facilitation; trade agreements; digital trade. • Country and subregional briefs. Available free online: www.unescap.org 1
28/11/2016 APTIR 2016: Merchandise Trade FIFTH YEAR OF WEAK GROWTH IN REGIONAL TRADE BUT THE REGIONS MAINTAINS ITS DOMINANT POSITION • Trade growth is yet to return to its pre-crisis levels. Total exports and imports from the region fell by 10% and 15%, respectively in 2015, but were still double the 2005 value (amounting to over $12.5 trillion) • However, trade/GDP, which shows dependency on trade, has fallen from a pre-crisis level of 56.7% to 42.7% in 2015 [and for goods and services, from 67.5% to 52.9%] • The region is the largest trading region, contributing 40% of world exports and 37.5% of world imports APTIR 2016: Merchandise Trade INTRAREGIONAL TRADE IS DOMINATED BY TRADE WITH EAST AND NORTH-EAST ASIA • 53 % of exports were 100 intraregional, intraregional import 90 24.6 31.3 share rising fast and reached 80 44.3 7.4 70 59%. 63.7 0.3 3.8 4.5 0.5 70.4 Total Export (%) 5.3 60 • ENEA still contributing more than 9.9 2.1 1.8 50 4.8 60% of Asia-Pacific trade. 24.4 40 12.4 28.8 • NCA growth and share rapidly 0.1 7.9 30 1.0 12.9 12.6 falling in recent years. 2.7 8.1 9.0 20 1.9 • SSWA also relatively 5.5 10.2 24.5 21.7 22.1 10 5.5 disengaged from the region in 8.1 5.9 0 terms of exports. East and South-East South and North and The Pacific North-East Asia (SEA) South-West Central Asia • China accounted for nearly 20% Asia (ENEA) Asia (SSWA) (NCA) of total exports by the rest of the Rest of the world The Pacific NCA region. SSWA SEA China ENEA Excl China 2
28/11/2016 APTIR 2016: Services Trade SERVICES TRADE RESILIENCE WEAKENING • Drop in merchandise trade and economic and political uncertainty triggered a strong contraction in commercial services trade. • Asia-Pacific exports fell by 4.5% and imports by 4.9% in 2015. • The region still a net importer of services accounting for 33% of world imports, and contributing 28% to world exports. • China accounts for more than a quarter of the region’s total imports while China, India, Japan and Singapore account for about a half of the region’s total exports. APTIR 2016: Services Trade CHANGING COMPOSITION OF COMMERCIAL SERVICE TRADE • Overall region’s services trade increased more than twice in the last decade. • Travel and OCS were the fastest growing service sector with OCS still the largest in terms of share and value. • Weak performance in 2015 and 2016 across all services except for travel which benefits from still strong intraregional demand. Commercial services trade of the Asia-Pacific, by sector, 2005 and 2015 3
28/11/2016 APTIR 2016: Foreign Direct Investment FDI MAKES A MODEST COME BACK AND A SHARP RISE IN GREENFIELD FDI INFLOWS The Asia-Pacific region attracted $559 • billion of FDI in 2015; a rise of 5.6%, but share of global inflows dropped to 32%. FDI outflows also dropped to $435 billion, • marking 22% decrease on 2014 levels. Greenfield FDI inflows to the region were • $352 billion; a 26% growth (compared to global rise of 6%), 40% of global inflows Greenfield FDI outflows from the region • increased by 15% and reached $263 billion. • Greenfield FDI to primary sector showed the strongest growth (coal, oil and natural gas - almost 3 times as much as in 2014). • But there are flows into technology and infrastructure sectors too. APTIR 2016: Foreign Direct Investment Subregions remain very diverse. • ENEA recorded high increase due to • jump of FDI to Hong Kong, China of 53%. With no change in SEA total, there was • reallocation within the subregion, with Indonesia registering fall, and other economies rise in FDI inflows. NCA continued to contract, as well as • the Pacific, while the growth to SSWA is mostly due to India attracting most of FDI. ENEA accounts for 78% of the AP • outflows. • Region’s overall policies Were dominantly liberalizing (43 measures out of 46). 4
28/11/2016 APTIR 2016: Trade Facilitation PROGRESS IN TRADE COSTS REDUCTION • Trade facilitation and reduction of trade costs remain urgent priorities for the region. • Trade costs remain heterogeneous across subregions. • Trade costs in NCA excessively high, but NCA also made relatively good progress in reducing trade costs. • Pacific small island developing states exhibit high costs limiting opportunities from intraregional trade APTIR 2016: Trade Facilitation CROSS-BORDER PAPERLESS TRADE MAY INCREASE EXPORTS BY $36 - $257 BILLION ANNUALY • Ratification of WTO TFA – 96 globally, 26 of those from ESCAP (12 WTO members from the region still to ratify). • The new Framework Agreement on Facilitation of Cross Border Paperless Trade in Asia and the Pacific can provide a useful mechanism to support members towards more efficient and less costly cross-border trade. • Framework Agreement opened for signature on 1 Oct 2016 (more information https://goo.gl/9ujweN ) 5
28/11/2016 APTIR 2016: Trade Policy REGIONAL TRADE POLICY CONTINUES IN RESTRICTIVE DIRECTION Increase in new trade liberalizing measures Increase in new trade restrictive measures Mid-October 2014 to mid- Mid-October 2015 to mid- Mid-October 2014 to mid- Mid-October 2015 to mid- May 2016 May 2016 May 2016 May 2016 Type of measure World Asia-Pacific World Asia-Pacific Type of measure World Asia-Pacific World Asia-Pacific region region region region Imports 252 94 116 39 Import 295 57 103 21 of which , tariffs 154 49 66 18 of which, tariffs 234 41 74 14 Exports 55 18 24 9 Export 52 14 26 6 Other 25 13 14 6 Other 7 14 3 4 Total 332 125 154 54 Total 354 85 132 31 Measures per month 17.5 6.6 22.0 7.7 Measures per month 18.6 4.5 18.9 4.4 • Changes in trade policies tend to mirror the overall tone and tenor of globalization. • Importance of countries remaining open to imports, and not resorting to unnecessarily trade-restrictive measures. • Worrying trend of increasingly restrictive measures across the region, dominated by behind-the-border non-tariff measures APTIR 2016: Trade Policy NON-TARIFF MEASURES ON THE RISE • G20 not coming true with commitments. • Increase in targeted protectionism partly as a consequence of accumulated trade distorting measures and excess capacity (steel). • Good news from services sector as no increase in protectionism there (need for better data). • New protectionism might arise from areas related to digital trade (e.g. localization requirements). 6
28/11/2016 APTIR 2016: Trade Agreements REGION IN NEED OF MORE CONSOLIDATION OF TRADE AGREEMENTS • 63% of all trade agreements in force globally involve Asia- Pacific economies. • Recent agreements increasingly include WTO+ (and WTO++) areas, such as competition, government procurement and investment. • Mega-regionals should be used as an opportunity to review of benefits of existing PTAs and to consolidate them. • More efforts in assisting businesses to utilize PTAs/ still improve RoO negotiations. APTIR 2016:Trade growth prospects UNCERTAINTIES WEIGH ON THE GROWTH OUTLOOK Export Import 2016 2017 2016 2017 Value Volume Value Volume Value Volume Value Volume Australia -0.98 2.93 11.58 1.16 -2.24 0.99 9.56 5.14 China -6.13 0.29 3.34 2.52 -8.80 -0.32 5.51 2.04 • Political economy more India -0.29 3.54 8.38 2.63 -1.67 -1.08 9.14 17.73 complex. Indonesia -6.43 -0.67 3.00 0.68 -8.13 -0.90 3.85 1.92 • China growth moderation still Japan 4.84 1.20 2.56 -4.42 0.43 1.75 1.86 3.83 affecting demand for Kazakhstan -23.16 -5.60 18.38 1.18 -25.72 -23.19 7.19 2.97 commodities. Pakistan -7.81 -6.50 5.44 3.48 -2.65 5.70 5.97 1.70 • India economic growth strong Rep. of Korea -7.25 -0.59 1.44 0.83 -5.47 3.65 7.57 3.53 but it needs to increase its share Russian Fed. -23.69 -2.54 11.61 1.65 -13.91 -11.61 5.59 4.65 in intraregional imports. Singapore -6.45 1.68 3.22 -0.56 -6.84 -0.25 4.67 0.35 • Facing new trade growth normal Thailand -10.43 -1.03 3.81 1.18 -3.38 -2.20 8.95 0.60 with lower trade elasticity. Turkey -0.21 3.62 5.05 4.22 0.24 7.21 8.99 6.23 • Value of merchandise exports Viet Nam 4.45 7.91 18.68 7.69 4.58 9.74 19.78 11.42 by developing Asia-Pacific Asia-Pacific b -5.21 0.68 4.53 1.49 -4.90 0.13 6.09 3.83 economies expected to continue Developed 3.07 1.54 4.56 -2.78 -0.36 1.55 3.88 4.10 falling in 2016, but are expected Asia-Pacific b to bounce back in 2017. Developing -6.46 0.53 4.52 2.22 -5.73 -0.17 6.51 3.78 Asia-Pacific b 7
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