SCO free trade area could be a tool in the fight against protectionism

The two-day 17th meeting of the Shanghai Cooperation Organization (SCO) Heads of Government Council concluded in the Tajik capital Dushanbe on Oct 12. A joint statement issued by the participating countries after the meeting said that its members should continue the work of consolidating the multilateral trade system, and fight against unilateralism and trade protectionism in any form.

It was another determined and unanimous pledge from the SCO to protect multilateralism and free trade. It follows the SCO summit in Qingdao in June, where the SCO heads of state called for joint efforts to protect the multilateral trading system guided by the rules of the World Trade Organization.

During the meeting in Dushanbe, many leaders, including Russia's Prime Minister Dmitry Medvedev, condemned the trade protectionism, unilateral sanctions, and political blackmailing being done by certain countries.

Premier Li Keqiang called on SCO countries to conduct feasibility studies for the establishment of an SCO free trade area, and the development of institutional arrangements for closer regional economic cooperation.

And the joint statement that came out of this week's meeting also called for greater trade facilitation and investment. These all reflect the SCO's growing role in the fight against trade protectionism and the defense of multilateralism.

The SCO member states cover nearly half of the world's population and more than 60 percent of the Eurasian landmass, and their combined GDP accounts for more than 20 percent of the global total. It is no easy task to establish a free trade area, but judging from the momentum the SCO has gained in its development, the basic conditions required are in place.

First, SCO members share a great deal of political trust. The leaders have relatively close personal relationships, and their country's frequent and close bilateral and multilateral contacts span many fields. All of the member states regard economic development and the improvement of people's livelihood as priorities, and they all have a strong desire to cooperate with each other.

Second, the SCO members are direct beneficiaries and staunch supporters of free trade and regional cooperation. They are geographically adjacent. They share close trading relationships. And they are each other's major trading partners. Their mutual trade and investment is expanding in scale, enlarging in scope, and has the potential for even greater regional cooperation.

Third, with the exception of Uzbekistan, all of the SCO member states are members of the World Trade Organization and share similar trading rules. This provides them with much of the common ground needed to develop a multilateral trading system.

And lastly, bilateral or multilateral regional economic and trade cooperation mechanisms established among SCO member states have laid a foundation for them to explore the potential of an SCO free trade zone. As Kazakhstan's President Nursultan Nazarbayev said at the SCO summit in 2017, the alignment of the Eurasian Economic Union and the Silk Road Economic Belt would open up new prospects for regional economic cooperation, including a free trade zone.

Despite overall improvements to the world's economic situation, global markets are faced with significant uncertainties. The process of economic globalization has encountered serious challenges and trade protectionism and unilateralism have been on the rise in some countries, which is becoming a major risk to the continued development of the world economy.

But despite these challenges, the SCO is unequivocally opposed to trading protectionism and is firmly adhering to the principles of mutually beneficial cooperation, multilateralism, and free trade. And it is standing firm as a positive and pragmatic force in support of economic globalization.