Asia-Pacific free trade zone will lead to further economic integration
(Xinhua) Updated: 2015-11-12 17:09The recent US led Trans Pacific Partnership (TPP) agreement that created a trade block for 12 countries throughout the pacific, it's argued, protected the politically sensitive industries of the United States while being at odds with the sustainable development goals of the wider pacific region.
Under free trade agreements, removing barriers to trade undoubtedly have winners and losers, but the key to succeeding is having an appropriate mechanism in place for short-term compensation.
When trade tariffs and barriers were removed in the establishment of the Eurozone, members were forced to compensate the "losers" in the process.
"That compensation doesn't mean that everyone should pay but every country that is part of the process should create a system in place where you can deploy the workers who loose their job," Moshirian said.
"If China's steel production is more efficient than Australia's, okay lets train the workers in Australia to do something else. That's really the idea."
However, in a political sense, leaving out China and Russia from the TPP is "not giving a good signal if you like," Moshirian said.
When asked if the push to set up the FTAAP was in response to the TPP, Moshirian said, "that's unfortunately the dynamic of the world," and again cemented his view that trade negotiations are best suited in a forum such as the WTO.
However, China plays an important role in the stability and continuity of the global economy, Moshirian said.
"(The) old Silk road of China which captured the imagination of people for centuries, and obviously now their (financial) contribution, I think will very very positive because we need foreign capital."
Foreign capital is a significant issue for the economic development for many parts of the world, especially for Australia, which, as history shows, cannot grow without foreign investment.
However, there will always be suspicions about sovereign capital funds, Moshirian said.
"But I think that we need to accept that the 21st century, sovereign wealth funds will become part of the capital market," Moshirian said.
