Trade in services has been on a steady increase over the past decade. However, trade liberalization in services has been lagging compared to trade in goods. A persistent challenge in the liberalization of trade in services has been methodological challenges in measuring services output and the process of liberalizing them. The RCEP Services Commitment Database provides an in-depth, quantifiable analysis of the liberalization measures under the RCEP agreement, across all four modes of supply, highlighting national treatment and market access. It builds on earlier work by the Economic Research Institute for ASEAN and East Asia (ERIA) and provides a baseline for comparison with the General Agreement on Trade in Services (GATS), enabling policy-makers, researchers, and stakeholders to assess the progress and impact of RCEP on regional economic integration. The webinar shared the findings from the database and facilitated discussion on the measurement and liberalization of services trade.

Investment aftercare services are increasingly important for foreign direct investment (FDI) promotion and facilitation. The Republic of Korea’s Foreign Investment Ombudsman has gained recognition among the investment community for its role in assisting foreign investors and domestic companies in resolving grievances and for strengthening institutional mechanisms to improve the investment climate. The Ombudsman’s role in grievance resolution in areas such as taxation, incentives, and labor relations has been instrumental for ensuring reinvestments but also minimizing investor-state disputes. This experience highlights the importance of addressing information asymmetries, ensuring neutrality and building trust between investors and firms for enhancing foreign investment. This seminar introduced the Republic of Korea’s efforts to become an investment hub through active FDI facilitation and effective aftercare services. It also discussed current efforts in other Asian economies to strengthen the role of the Ombudsman as part of their investment facilitation strategies.

The analysis of potential additional tariff increases by the United States’ (US) new administration, using the Global Trade Analysis Project (GTAP) computable general equilibrium (CGE) model, reveals that unilateral tariff hikes initially boost US nominal income through increased government revenue. However, retaliatory tariffs from other economies lead to a decline in US income due to contracting economic growth and reduced tax revenues. Real GDP in the US declines in all scenarios, with the negative impact intensifying when tariffs extend to its free trade agreement (FTA) partners. While the US trade balance improves due to reduced imports, other economies, particularly the People’s Republic of China, experience declines in nominal income and real GDP due to deteriorating terms of trade and reduced exports. Economies with FTAs with the US, such as the Republic of Korea, are expected to see positive effects through increased nominal income and real GDP due to trade diversion benefits.

The potential for connectivity among Asian carbon markets is significant, with economic, environmental, and strategic benefits anticipated. Economically, linking markets could lower emissions-reduction costs by offering cheaper credit options and increase liquidity while reducing price volatility. Environmentally, it could minimize carbon price differentials and promote cleaner environments. Strategically, it could foster regional relationships and demonstrate global climate change leadership, potentially enabling more ambitious climate goals. However, uncertainty persists regarding the extent and nature of market integration due to varied technical designs, governance structures, and operational capacities across existing and proposed markets. This webinar aimed to understand the history and experiences on carbon market linkages, and the required institutional, procedural, and regulatory mechanisms. It included discussions on the potential benefits, barriers to linkages, and pathways forward for Asian carbon market connectivity in light of evolving international carbon market trends and policies.

As G20 emerging markets account for almost one-third of world GDP and about one-quarter of global trade, spillovers from shocks originating in these economies can have important ramifications for global activity. Chapter 4 of the IMF’s World Economic Outlook April 2024 documents that, since 2000, spillovers from shocks in G20 emerging markets—particularly the People’s Republic of China (PRC)—have increased and are now comparable in size to those from shocks in advanced economies. Trade, notably through global value chains, is a key propagation channel. Spillovers generate a reallocation of economic activity across firms and sectors in other countries. Looking ahead, a plausible growth acceleration in G20 emerging markets, even excluding the PRC, could support global growth over the medium term and spill over to other countries. Policymakers in recipient economies should maintain sufficient buffers and strengthen policy frameworks to manage the possibility of larger shocks from G20 emerging markets.

New approaches under Article 6 of the Paris Agreement provide opportunities for linking emission trading schemes (ETS) between jurisdictions. This can be useful for Asia and Pacific economies by increasing the liquidity of a carbon market, offering regulated entities additional abatement opportunities, and reducing the cost of achieving the combined emissions caps of linked ETS. This webinar sought to understand the theoretical underpinnings and practical implementation of ETS linkages in the Asia and Pacific region.