2025 RCEP BUSINESS FORUM
Address by Hon Andrew Robb AO

11th February, 2025
The University of Sydney Business School

The stunning increase in global prosperity over much of the last 200 years is entirely due to the evolution of society in the direction of freedom and the institutions and values that support a free and market-based community.

China’s re-emergence since 1979 to where it had been for 18 of the last 20 centuries – as part of the centre of political and economic gravity in the world – makes that point in a profound way. Even more so, after China joined the World Trade Organisation (WTO) in 2001, and the conduct of China’s foreign trade moved from permitting only a handful of State-Owned Organizations (SOEs) to being required to also include any private Chinese company, resulted in China quickly becoming the largest trading nation with over 6 million companies involved in trade.

Over this length of time the free and market-based communities progressively fostered globalisation prompting the steady emergence of millions of interconnected global supply chains which drive growth and prosperity, and promote peaceful co-existence across the globe.

This globalisation was in many ways instigated by the West, based on 3 pillars:

• A common set of trading and investment rules
• Acceptance of the law of comparative advantage, and
• Open borders, involving removal of protection.

RCEP is one of the latest among hundreds of free trade agreements based on these 3 pillars.

However, these proven foundations are under threat and face the biggest challenge since World War II.

We are seeing much of the West closing up and regressing to massive subsidies, tariffs and non-tariff barriers, unbelievably led by the US.

But ironically, and very fortuitously, we are seeing these Asian economies, who now make up 60% of the global population, opening up, and as a consequence they are delivering growth, jobs and prosperity far beyond what these economies have ever experienced.

As a consequence, I believe world growth over much of the next few decades will be overwhelmingly driven by these Asian economies.

The 2016 CPTPP, which continues to be the most advanced regional free trade agreement in the world, has been rejected by both the Republican and Democratic parties in the United States, despite the US having led, and successfully concluded the negotiations. The Democrats subsequently introduced massive subsidies which are no different than a tariff in distorting trade and investment flows massively, with all the associated serious negative impacts on competitive opportunities, exchange rates, capital markets and endless supply chain disruption. Australia has been impacted along with the rest of the world, as billions of dollars have been sucked out of so many countries and into the US chasing the subsidies.

This massive protectionist move by the world’s biggest economy, and strongest advocate of the 3 pillars for nearly 70 years, has been taken to yet a higher level of trade and investment distortion by President Trump who campaigned as the Tariff Man and described, and I quote “tariffs are the greatest thing ever invented”. End of quote.

Throwing the law of comparative advantage out the window will massively distort and damage the efficient allocation of resources which has created a quality of life enjoyed across the western world, and aspired to by the rest of the world.

All the while the ASEAN countries, representing over 700 million people, and India with a population of 1.4 billion people, are dramatically opening up, and following the 3 pillar rules of recent trade agreements such as RCEP, CPTPP, Australian India Free Trade Agreement and many other bi-lateral such agreements that they have entered into in recent years.

I had the privilege of negotiating and signing the China Australia Free Trade Agreement (ChAFTA). In that agreement 100% of exports from China to Australia now face zero Australian tariffs, and 99% of Australian exports to China face zero China tariffs.

Notwithstanding the impact of COVID and the illegal sanctions placed by China on a number of Australian products for a period of time, the total value of trade between our two countries was $98 billion in 2015 when ChAFTA was signed and today, 10 years later the total value of trade is $330 billion – from $98 billion to $330 billion in 10 years. The FTA agreement held fast. Free trade works, notwithstanding bumps along the way.

I’ve long held the view that trade agreements should start with bi-lateral agreements, then regional agreements built off many of those bi-lateral agreements, and ultimately if anyone lives long enough bring them all together into multi-lateral agreements.

The appropriateness of this approach was borne out in my mind with the Trans Pacific Partnership (TPP) Agreement, now called the CPTPP.

Many of the 12 countries had bi-lateral agreements with one another. It meant that on many issues to be negotiated, we didn’t start with a blank piece of paper.

In my time as Australia’s Trade and Investment Minister I not only negotiated the TPP through to conclusion but also participated for several years in the RCEP negotiations.

Consistent with my view of using bi-laterals as the building blocks for constructing regional agreements, I also held the view that the way to get a truly comprehensive free trade agreement for the Asia/Pacific as a whole is to seek to begin a negotiation which brings RCEP and CPTPP into one Asia Pacific Free Trade Agreement.

Obviously, such a proposition must seek to involve the Unites States, India and China. The economic power of such an agreement would be truly extraordinary, and focusing the region on such an initiative could assist in resolving some of the current geopolitical tensions.

Given the economic leadership role the Asian countries will increasingly play over the decades ahead there is every reason why it would be appropriate for countries such as the ASEAN, Japan and Australia, to step up and seek to initiate, and lead, such a powerful proposition.

At a time when the unambiguous successes and gains of the last 70 years are under threat, it is time to stand up, and as Thomas Jefferson once so aptly said, and I quote “In matters of style swim with the current, in matters of principle stand like a rock”. End of quote.

Thank you.