AchievementsinCooperation
AsVisionandActionsonJointlyBuildingtheSilkRoadEconomicBeltandthe21st-CenturyMaritimeSilkRoadnotes,thephrase“unimpededtrade”referstoeffortsto“improveinvestmentandtradefacilitationbyremovinginvestmentandtradebarrierstocreateasoundbusinessenvironmentinaregionandforallparticipatingcountries.”Thedocumentcallsforeffortsto“discussfreetradeareaswithcountriesandregionsalongtheBeltandRoadtocreatepotentialforexpandedcooperation.”
SincetheBeltandRoadInitiativewasproposedin2013,ChinahasworkedtobuildeconomicandtradecooperationplatformswithcountriesalongtheBeltandRoadtopromote“unimpededtrade”andhasachievedimpressiveresults.StatisticsshowthatChina’stradevolumewithcountriesalongtheBeltandRoadtotaled6.3trillionyuanin2016,accountingforaquarterofitstotalforeigntrade.ThevalueofitsoverseasprojectcontractsincountriesalongtheBeltandRoadincreasedby36percenttoUS$126billion,andChina’sdirectinvestmentsinthosecountriesaccountedfor8.5percentofitstotaloutboundinvestments.Chinahasreachedfreetradearea(FTA)agreementswithgreaternumbersofcoun-triesandregions.AftersealingadealwiththeAssociationofSoutheastAsianNations(ASEAN)toupgradetheirfreetradeagreement,ChinaconsecutivelysignedFTAagreementswithmorethan20countriesandregionsincludingSouthKorea,AustraliaandNewZealand.Negotiationswithothercountriesareongoing.Chinesecompanieshaveestablished56economicandtradecooperationzonesinover20countriesalongtheBeltandRoad,helpingthosecountriescreatenearlyUS$1.1billionintaxrevenuesandsome180,000jobs.Alloftheseachievementscanbeattributedtoeffortstopromoteunimpededtrade.
TradingChallenges
Unimpededtradecanbenefitsomecountriesandpeoplewhileunderminingtheinterestsofothers.The“non-neutrality”oftradeglobalizationhascausedsomestakeholderstoblockfreetradeandevenpersuadegovernmentstoadoptprotection-istmeasurestoimpedetrade,eveninsomecountriesalongtheBeltandRoad.
ThefactofthematteristhatregionaltradebetweencountriesalongtheBeltandRoadremainslowcomparedtotradeelsewhere.Highcostsinfieldslikecustomsclearance,transportationandlogistics,underdevelopedinfrastructure,inconsistentpoliciesandmeasuresconcerningcustoms,investment,taxationandcurrency,unbalancedlawenforcementandinvestmentandtradebarriersmakeitdifficulttofreelytransportgoodsandservices.
Tofurthercompoundtheissue,unbalanceddevelopmentandcomplicatedgeo-politicalconditionsinsomecountriesalongtheBeltandRoadcreatebottlenecksthataffecttheentireregion.Thelackofamultilateralfreetradearrangementandlongtermcooperationmechanismhashinderedregionaltradefordecades.
FuturePlans
Toaddressdoubtsandcomplaintsbyvestedinterestgroupsopposingfreetradeinsomecountries,governmentsshoulderectsupplementarymechanismsandpromoteinstitutionalmeasurestocompensatethosewhomaysufferlossesarisingfromfreetrade.Forinstance,governmentsshouldprovidere-employmenttrainingforlaid-offworkersandimproveinfrastructurethatenhancestradingcapacity.
Tooptimizetrade,ChinashouldstreamlineandstandardizeitscustomsclearanceandshareitsworkwithcountriesalongtheBeltandRoadbecausecustomsclearanceintegrationwouldlowercostsandenhanceefficiency.Consideringinconsistentpolicyaswellaslawenforcement,countriesalongtheBeltandRoadshouldadoptstandardizedrulesandregulationstobuildanintegratedsupervisionmechanism,createtradepolicyconnectivityandpromoteopennessinlawenforcement.
Finally,countriesalongtheBeltandRoadshouldbreakthroughbarrierscurrentlyrestrictingtradeconditionsbysigningfreetradeagreements,engaginginhigher-levelcooperation,expandinginvestment,formulatingnewtradeandinvestmentrulesandenhancingregionalopenness.Theyshouldsetuppilotcrossbordereconomiccooperationzonesinborderareas,wheregoodsandservicescanbefreelyexchangedtopromotemoreenhancedtradeandinvestmentliberationintheregion.
TheauthorisaresearchfellowattheInstituteofWorldEconomicsandPoliticsundertheChineseAcademyofSocialSciences.