PRESENTATION TO APEC BUSINESS ADVISORY COUNCIL: ADDRESSING PROTECTIONISM AND NON TARIFF BARRIERS

BRISBANE, 24 FEBRUARY 2025

STEPHEN JACOBI, EXECUTIVE DIRECTOR, NZIBF

My thanks to Anna Curzon and Stephanie Honey for giving me one last opportunity to speak to ABAC.

I want to talk today about rising protectionism and proliferating non tariff barriers.

It’s not a new topic – ten years ago in 2015 under the Philippines chair ABAC wrote to APEC Economic Leaders:

“Our recommendations are premised on the conviction that an open, predictable and transparent trade and investment environment for goods and services generates new opportunities for all. While much has been achieved, more needs to be done particularly in view of the changing dynamics of the global economy, which create new challenges to equitable and sustained growth…”

This year, as we meet here in Brisbane, we face a greater challenge to the rules based trading system than we have seen in recent memory.

It is tempting, particularly at this time, to point to the tariff actions of one economy, but in fact this trend has been increasing across APEC steadily for some time.

And it’s not just about governments, it is often cheered on by many business “leaders” who look for a short term expedient to help overcome bigger issues of competitiveness.

But make no mistake – this is not business as usual.

The challenge is so profound that it will require every ounce of energy, commitment and advocacy from ABAC and allied business groups around the region to ensure it does not set back decades of progress we have made in economic integration across our region.

The simple truth is that since ABAC met in Manila in 2015 trade restrictions applied by APEC economies have been on the rise, affecting an increasing percentage of trade between APEC economies.

While you might be comforted by a slight improvement in 2024, look to the effect that rising trade policy uncertainty is having on the growth outlook.

The Global Trade Alert, WTO and WEF have all pointed recently to a sharp increase in trade restrictions.

This has particular impact in small, open economies, like New Zealand, which are more susceptible to the weaponisation of tariffs, expanding “industrial policy” (by which we really mean subsidies) and technology restrictions, if not directly then by being “caught in the cross-fire”.

These risks apply not only to goods trade but also to services trade and the digital economy.

Services trade restrictions have barely moved in APEC in the last ten years.

The consequence is that the capital investment that is required to address other pressing challenges in the global economy will be less forthcoming.

I am thinking in particular of areas such as sustainability, climate, health, inclusion and new technologies which are all being actively addressed elsewhere in the ABAC agenda.

Likewise, as the OECD work in 10 APEC economies shows, digital restrictions remain significant, although uneven, risking the advance of the digital economy.

What we see here is the dead hand of protectionism which today overhangs the global economy and threatens the slow recovery.

It is a bleak picture.

So what are we to do in such a situation ?

Well, we know what the answer is.

We said as much in 2015 and have been saying it in different ways every year since:

“Our recommendations are premised on the conviction that an open, predictable and transparent trade and investment environment for goods and services generates new opportunities for all”.

Clearly it is vitally important that ABAC continue its advocacy in favour of the WTO and in support of comprehensive, high quality free trade agreements as pathways to the broader vision of FTAAP.

One area where I suggest it might be useful to focus more attention is on non-tariff barriers.

We know there are a range of regulations applied at the border and behind the border for legitimate reasons – biosecurity rules, safety standards, labelling requirements:  we call these non-tariff measures (NTMs). 

They become non-tariff barriers (NTBs) when they are more trade restrictive than necessary – are applied selectively (only to some imports, or to imports and not locally produced goods, or to some country suppliers and not others), or not on the basis of “honest science”, or when they lack transparency.

NTBs can be hard to identify and even harder to remedy.

As you recall, ABAC has already had some success in this area.

In 2016 we championed a set of cross-cutting principles to ensure NTMs do not become NTBs.

Those principles included elements such as:

• transparency, coherence and timeliness
• consultation with affected businesses
• non-discrimination between suppliers and against imports
• based on science and international norms and standards.

Importantly NTMs should be least trade restrictive and where possible focus on outcomes rather than pre-determined processes.

These principles were adopted in 2018 by APEC itself with some modification but of course in a voluntary and non-binding way.

The challenge now is to think about how we could make them work, particularly in the contested environment for trade policy we are now facing.

ABAC should be on the look-out for best practice in this area and in the spirit of capacity building, should share this information when it becomes available.

In New Zealand for example there is a government website – www.tradebarriers.govt.nz – which enables businesses to notify government agencies of trade barriers, both tariff and non-tariff, which they are facing.

The Government has adopted standards for replying to enquiries received and a range of progressive actions starting with information gathering and going right through to negotiation with economies imposing the measure and even onto the WTO.

Some impressive results have been achieved in assisting businesses to overcome potentially serious issues.

I understand New Zealand is looking to do further work on NTBs in CTI this year – this is something ABAC could usefully support by bringing a real world perspective on the problem.

APEC may not be the place to resolve persisting NTBs but APEC can be the place for sharing best practice about how they can be identified for what they are as well as avoided in the first place.

Finding ways to address NTBs is not going to solve the big problem we face at present.

Protectionism is not going to be stared down by a website.

The way ahead is going to be tough on business, which is why ABAC’s advocacy remains so important.

As I leave ABAC after 16 years, as Alternate Member and head of the New Zealand Secretariat, I am more convinced than ever of the role it has to play in presenting APEC Economic Leaders, Ministers and senior officials with the information and advice they need to progress our region’s sustainable economic future.

ABAC is unique – as the voice of business in APEC, you are mandated to present those recommendations at the end of every year.

They may not be always what our Leaders want to hear, but they are what the region’s businesses want you to say.

Above all I hope you will continue to maintain ABAC’s strong and courageous voice in favour of an open, secure and transparent trade environment and the opportunities this creates for all.

If that was right in 2015, it is surely right now.