Trade winds put protectionism on agenda

A couple of trade agreements underway might spur this regional push.

Besides the RCEP, another regional agreement is the Trans-Pacific Partnership (TPP), backed by the US. The TPP has been in the works since March 2010 but membership would be limited because it calls for a greater degree of openness, according to ADBI.

In turn, these regions are linked by a "spaghetti bowl" of trade agreements that, while increasingly complicated, is also increasingly comprehensive. An APEC-wide agreement — which has been proposed under the name Free Trade Agreement Asia-Pacific (FTAAP) — could be accomplished by linking the RCEP and the TPP.

ADBI says that a FTAAP could lead to gains in trade of $1.9 trillion by 2025, compared with gains of $644 billion under the RCEP and $295 billion under the TPP. Ultimately, says ADBI, the larger the grouping, the larger the gains.

In theory, all this is good news for developing Asia, which could see trade powered forward by the growth in FTAs.

Brunei, a tiny economy looking to diversify, could be a big beneficiary of its participation in ASEAN and all these agreements.

The ADB expects Brunei's economy to grow by 1.8 to 2 percent through this year and the next but, significantly, the growth is coming from non-energy sectors, which expanded by 3.4 percent in the first three quarters of this year.

This growth, says ADB, highlights the "progress in the government's drive to diversify the economy before hydrocarbon reserves get depleted".

But for FTAs to work, countries will have to look beyond their own concerns and consider the regional economy.

As Philippine President Benigno Aquino said: "There is still a tendency (for countries) to protect their economies, to put up barriers, which lessens economic activity."