Asia-Pacific exports and imports grow at robust pace
Powered by China, the Asia-Pacific region posted a growth rate of some 20 per cent in both exports and imports in 2010 despite ‘murky’ protectionist steps by developed countries, and is expected to grow at a robust, if slower, pace in 2011, according to a United Nations report.
The Asia-Pacific Trade and Investment Report 2010 notes that the strong performance of exports and trade in general is the result of a vibrant China which imports intermediate goods from the rest of Asia and exports finished goods to the rest of the world.
"While the stimulation of domestic demand and investment has also played an important role in reviving many economies, we find that exports continue to be a major engine of growth in the region," said Ravi Ratnayake, director of the Trade and Investment Division at the UN Economic and Social Commission for Asia and the Pacific (ESCAP), which issued the report. "As a result, Asia’s share in world exports continues to rise."
This year, exports from developing economies in the region grew 19.3 per cent and imports 20.2 per cent, with exports expected to grow 10.5 per cent in 2011, led by China, India, Turkey and Malaysia. Intra-regional trade has increased but remains largely focused on intermediate goods, while exports in finished goods and services are still dependent on mostly western markets.
But one of the downsides are the steps taken by the industrialized world to keep out imports. "In developed country markets Asia-Pacific exports often face murky protectionism with measures that are imposed ostensibly for health reasons or environmental protection purposes but are really hidden measures to protect domestic industries," Ratnayake said.
Other risks for Asia-Pacific trade include continued stagnation in consumer demand in Europe, Japan and the United States, coupled with the adoption of austerity programmes in various countries, the debt and Euro crisis in Europe, and the potential for regional currency wars.
The report also warns of the uncertainties in international trade rules, noting that as the so-called Doha negotiations on trade liberalization have stalled, the number of free trade agreements in the region continues to rise, leading to less transparency in rules. Some 35 per cent of all trade conducted by Asia-Pacific economies now takes place within the framework of such accords.
While many countries of the region are trading more, only some do so more efficiently, the report says. China has made impressive progress in reducing international trade costs, ranking along with Germany and Malaysia among those with the lowest, but there is a lot more to do in streamlining and simplifying trade procedures in the region.
"It still takes three times longer to complete trade procedures in Asia-Pacific developing economies than in developed economies such as Australia, Japan and New Zealand," Ratnayake said.
Inflows of foreign direct investment have also increased, but have yet to reach levels seen before the global economic crisis, while countries almost doubled their share in global outflows to 27 per cent in 2009, with an increasing share directed to the region itself.