Economic and political governance in the Asia-Pacific is a complex web of acronyms representing a range of institutions which have been created to respond to particular issues, manage complex relationships, and ultimately, preserve stability, security, and peace in a diverse region (1). While these institutions have been very successful in their overarching goal, they are not immune to shifting geopolitics, particularly given that the biggest story of our time – the US-China relationship – is being played out in the region.
Rather than a US-led global order, complexity, diversity, and multipolarity will become the standard operating environment. To maintain competitiveness, Australian businesses need to ensure they are informed and prepared for the unpredictable.
While Asia-Pacific governance institutions may not be perfect, they have come to exist through long and difficult conversations and compromises among the various actors. There is no doubt that the web of interrelationships has played an important role in maintaining peace, stability and security in the region. However, geopolitical flux is creating a new fluidity to the shape of the regional architecture, without much clarity around the ultimate direction.
In the absence of overarching agreements, the rules governing trade and investment are likely to become increasingly complex.
To maintain competitiveness and profitability over the longer-term, business should be doing some key things.
Read further to find out what these are.
(1) A table outlining institutions, roles, and membership is at Appendix 1 on p. 7. An illustrating of their overlapping responsibilities is at Appendix 2 on p.11.