US risks missing out on trade liberalisation in Asia-Pacific

MARKET-opening international trade policy reform tends to yield positive results. When trade flows increase, nations on both ends tend to benefit. At the enterprise level, in a trade transaction both parties usually perceive a benefit; otherwise the transaction would not take place. And trade often delivers benefits domestically thanks to increases in productivity from economies of scale and specialisation, competition and returns to investment in innovation.

The economic gains generally outweigh any trade-related adjustment costs by a large margin. According to one big historical study, countries that liberalised their trade regimes were able to accelerate annual economic growth on average by about 1.5 percentage points.

We can see this in action among the Asia-Pacific nations. Global, regional and bilateral accords are delivering increased market openness. This rules-based framework is helping to reduce policy uncertainty and impose discipline against unfair trade practices. Clearly, there is room for improvement, but overall this framework works well.