This was a key point I made in yesterday’s presentation to the “Citizens’ Commission on a National Trade Policy”:
1.0 The future is Asia. Most models of international trade assume that greater trade will occur with nearby countries than with those which are far distant. At present, Sri Lanka’s goods exports violate this assumption, going primarily to the US and Europe. This was also the case with Mode 2 service exports in tourism until recently. But things have changed in tourism service exports, with India and China becoming the principal sources. We must make active efforts to reorient goods exports to Asia because Asia is where the highest growth is occurring. With turbulence in trade policy caused by the failure of the Doha Round of World Trade Organization (WTO) negotiations and the US withdrawal from the Trans Pacific Partnership (TPP), we must focus on plurilateral agreements within Asia, giving primacy to the emerging single market of ASEAN, India and China. Joining some form of ASEAN plus agreement such as the Regional Comprehensive Economic Partnership (RCEP) would be optimal. A comprehensive goods, service and investment agreement among BIMSTEC countries would also be desirable.
I was pleased to see that the above thinking is shared by experienced firms with skin in the game, as reflected in this quotation from an article about the Belt and Road Initiative:
The hope of future prosperity is enticing. Li and Fung, a Hong Kong company that for decades has sent Chinese-made goods to American and European department stores, is now marketing to small and medium-size retailers in the developing world. It is a bet that the Chinese initiative will lift consumer spending across dozens of countries, said Victor Fung, chairman of the Fung Group, its parent company.