Elite Talk: Alan Bollard on APEC, FTAAP, New Silk Road

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Transcript

The APEC events are taking place here in Beijing. So, in this episode, we’ll look at China’s APEC Chairmanship, the proposed APEC-wide free trade initiative FTAAP and China’s New Silk Road.

Joining our program to talk about these topics is the Executive Director of the APEC Secretariat Dr. Alan Bollard. Before heading the Singapore-based APEC Secretariat, Dr. Bollard served as the Governor of the Reserve Bank of New Zealand as well as the nation’s Treasury Secretary. And he's with us on the phone.

Host: As you know, China has assumed the chairmanship of APEC 2014. Then, what difference does it make? What implications does China’s chairmanship have for China, the other APEC economies and the rest of the world?

Bollard: China is hosting APEC this year, and it’s been a very busy, very active year with a number of important initiatives for boosting trade, investment and sustainable growth agreed and more still to come. It’s been a year when APEC has been invigorated. Trade ministers from the region are meeting in Beijing, and they will sign off on more initiatives to strengthen our economies, job creation and wages, and those will all go to the economic leader’s meeting for them to be announced. It’s been a year when we had a lot of meetings and a record number of ministerial meetings. They’ve all been organized very well and very thoroughly.

We still have more to do, but I am hopeful that we will deliver policies that will specifically address infrastructure investment and connectivity gaps to ensure that people and goods can move around the Asia-Pacific more cheaply and easily, for example. Within some of policies being worked out, China has been quite innovative in terms of looking for new drivers for growth. We know that, in the past, APEC growth was driven by strong trade growth. Since the global financial crisis, trade growth has slowed down so we’re looking for new growth drivers in the region; and China has made much contribution to this.

Host: Let’s talk about the FTAAP and the trade landscape in the Asia-Pacific. You know, the FTAAP has been talked about for many years, but has not progressed as fast as some regional FTAs, such as the US-led TPP and the ASEAN-led RCEP. So, based on your inside knowledge and expertise, the proposed FTAAP, TPP and RCEP, which one do you think will be the future?

Bollard: Well, I think that depends on how far you look. I know that China is doing a lot of work, looking at the FTAAP. FTAAP has been cited as a possibility for some years, but really at the moment it’s only a vision, and we want to work out what it might actually mean. We know that it’s a long-term objective. It won’t suddenly reach FTAAP. But we do see that as being the big goal out into the future.

China this year would like to bring FTAAP to our attention, and probably agree to work on a study that will help us understand what it means; when we might achieve it; how we might achieve it; and what paths would be followed to get there; could this be the Trans Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP), or a different stepping stone. It’s still a work in progress.

Host: But for the benefits of the entire Asia-Pacific region, in your opinion, which trade pact should the 21 APEC economies really engage in, regardless of any political factors?

Bollard: Well, they have all seen it. They said in the past that we are moving towards FTAAP. That’s already been said. But we don’t know enough about what that means yet, and China wants to clarify all that. At the moment, the only negotiations are RCEP and TPP. Indeed, we cannot be sure about what those mean, because it’s still too early to know what’s in the material. Maybe TPP will be concluded this year, but it’s still not secure.

Host: Just as you said, the FTAAP is certainly still a vision, but do you think it’s feasible?

Bollard: Yes, but it will take some time, and it will take a lot of commitment from leaders for us to get there. So, I think it is achievable, but it will be somewhere in the future. What is quite possible is that TPP and RCEP will both need to be concluded first.

Host: Alright, let's move on to the topic about China's New Silk Road strategy. As you know, Chinese President Xi Jinping has proposed a so-called "One Belt and One Road" initiative, which is meant to strengthen cooperation and economic ties between China and its neighboring countries. So, what're your thoughts on this initiative?

Bollard: I think that’s very much in line with APEC’s initiatives for connectivity, which means physically connecting our trade routes, and addressing more complex structural barriers to make it easier for goods, services and people to get across borders. I expect it will make use of some APEC trade facilitation measures like the introduction of electronic forms and customs single windows that reduce red tape at borders so that those sorts of initiatives can happen. It isn’t an APEC initiative; it’s a Chinese government’s initiative. But it’s very much in line with what we are trying to do.

Host: So, what opportunities do you think the Silk Road Economic Belt will bring to China and the other APEC economies?

Bollard: At the moment, most trade opportunities are around the Pacific Rim, but when you start recovering and growing again, there will be a strong demand for the export of merchandise and other goods from East Asia. At the moment, most of that goes via the Malacca Straits, between Indonesia, Malaysia and Singapore. But people are looking for new possible trade routes and if those across China can be competitive, then there will be a lot of demand for services for them.

Host: Lastly, I know you've travelled to China multiple times this year because of the APEC meetings. So, would you care to share with us some of your personal experience here in China? Your impressions about the country?

Bollard: Ok. Well, this year I have come to China maybe a dozen times for a lot of meetings. It’s been a very interesting experience. And I had the chance to have meetings in a number of progressing cities, not just in Beijing and Shanghai, but in Xiamen, Ningbo, Macau and Qingdao. That also means from a personal point of view, I’ve been able to visit some other parts of China that I haven’t been to before, for example, Hangzhou and the birthplace of Confucius — Qufu. So, it’s been a very enriching experience — seeing more places in China, seeing the huge progress it has made on infrastructure investment and seeing how cooperation in APEC is influencing development and areas where we can do more.

(The transcript has been slightly edited for brevity and clarity.)

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