Heraldo Muñoz: Trade After the Trans-Pacific Partnership

Heraldo Muñoz, Chile’s foreign minister, center, during a news conference this month after a Trans-Pacific Partnership meeting in Viña del Mar, Chile. Credit Esteban Felix/Associated Press.

SANTIAGO, Chile — In mid-March, ministers and high-level representatives from nations that have signed on to the Trans-Pacific Partnership, as well as China, Colombia and South Korea, met for the first time since the Trump administration withdrew from the trade accord. The signal from Viña del Mar, Chile, where the meeting took place, was clear: Multilateral trade and Pacific integration are alive and kicking.

The meeting, hosted by Chile as president pro tempore of the Pacific Alliance trade bloc (Chile, Colombia, Mexico and Peru), was a needed symbol of stability in increasingly uncertain seas. Protectionism, nationalism and populism are sadly on the rise worldwide. Indeed, multilateralism and the very concept of economic collective security are being challenged. The fears that drive retrenchment on trade must be reckoned with. Social and economic inequities resulting from trade are real.

The countries in the Pacific Alliance will continue to work with the United States on a bilateral basis, but the Asia-Pacific region is ready to lead the new age of globalization in the 21st century by continuing the pluralistic approach to trade envisioned in the T.P.P., even though the accord no longer exists as we knew it.

The 15 Pacific Rim nations in attendance in Chile three weeks ago signaled a strong and stable consensus across the Asia Pacific region that open economies, free trade and regional integration represent the way forward for achieving inclusive and progressive development. We remain committed to working pragmatically with its core principles and contents to advance open commerce, coupled with socially and environmentally inclusive domestic policies.

Chile, for instance, has used economic integration and trade deals to drive growth, which in turn allowed the country to adopt smart, socially responsible policies regarding infrastructure, education, health care and labor rights to ensure the benefits are seen by all Chileans, not just an elite. The Chilean economy has grown 4 percent on average over the past 10 years, largely on the back of growing trade, while the poverty rate has decreased steadily to 11.7 percent in 2015 from 39 percent in 1990, when under a restored democracy Chile began negotiating trade deals.

To that end, the Pacific Alliance agreed in Viña del Mar to begin trade negotiations with Asia- Pacific partners with the aim of quickly concluding comprehensive, balanced agreements that meet the high standards set by the T.P.P., such as improved services access, stronger labor rights, enhanced environmental protections and common guidelines for e-commerce. This commitment represents a major shift, as the emphasis is no longer on what will happen to the T.P.P. but on advancing its vision by using the Pacific Alliance as the platform for future trade agreements.

Trade, particularly intra-hemispheric and with its Pacific partners, gives countries like Chile access to potentially billions of consumers and to previously unavailable lower-cost goods and services. But it also facilitates the advent of new small and medium-size businesses, which help societies to develop equitably and fairly, and provides a unique opportunity to learn from the experiences the region has accumulated in the field of production and productivity.

Chile is an example of how trade makes developing nations prosper. Today, it leads Latin America in competitiveness, while it continues to make improvements in income equality and poverty reduction. Regional economic integration has played a key role in these achievements. Ninety-seven percent of Chilean trade is conducted through free trade agreements, and its exports to, and from, its partners with such agreements have performed better than those without.

The Pacific Alliance alone represents over one-third of Latin America’s gross domestic product, accounts for approximately half of the region’s trade with the world and includes a growing consumer market of over 214 million people committed to free and fair trade, working together to achieve the free flow of goods, services, people and capital.

To take even one step back from integration and open trade would mean sacrificing the progress we have made so far.

We don’t need to agree on everything to gain from trade. The way different countries see bilateral, regional or multilateral agreements might differ, but their leaders owe it to their citizens to set out constructive trade agendas that advance development and well-being for all.

A good example is the bilateral United States-Chile Free Trade Agreement, which has produced benefits for both countries. Since this agreement went into effect in 2004, United States exports to Chile have increased to more than $10 billion from $2.7 billion, and Chilean exports to the United States have increased to $6.7 billion from $3.7 billion. The United States now enjoys a substantial annual trade surplus with Chile.

Multilateral cooperation is an effective way to expand our economies, ensure security and promote the exchange of knowledge and talent. United States participation in such integration would certainly benefit all involved.

However, trade is not a zero-sum game, as some would say. For too long, the countries driving economic globalization have taken public support for free trade as a given. With rapidly changing economies, we must now acknowledge the real dangers of people being left behind. At the same time, we must not pretend that closing borders and raising tariffs will reverse the continuing march of technology that has created an increasingly globalized and interconnected world. Instead, we must check ideologies of fear at the door, and build public support by working to harness trade and integration as an engine for inclusive growth and opportunity for billions.

It is time to begin reshaping the future of trade. The Viña del Mar meeting has set us on our way. We can all win or lose together.