Leaders must give the political push to keeping trade open. In their informal meeting at Davos recently, trade ministers shared with each other their difficulty in facing the rising political pressures at home to introduce some form of trade barriers. They also remain uncertain whether a global trade deal can be reached this year. Until then, they will find themselves fighting a battle on their own and without having an effective weapon. The Indonesian trade minister, for instance, has recently introduced domestic transparency procedures in the decision making on protection to try to minimize the damage.

The London Summit is where words must be translated into action. President Obama will be there, and he will participate with a clean slate. The many noises that have come from Washington D.C., like the ‘Buy America’ provision, have been worrying. Obama has clearly and unequivocally signaled his opposition to that provision. He also pledged to curb direct payments to agricultural producers. President Obama is the one that can provide the necessary leadership for open trade at home as well as globally. A clear signal from him at the London Summit can have a tremendous impact.

But the burden of leadership cannot be placed on Obama alone. President Obama’s leadership at home cannot be sustained if he is unable to show that others will favorably respond to his initiatives. East Asia must share this burden by making significant concessions. This is in East Asia’s self-interest as the region has a very great stake in global trade. To do so, East Asia must be organized and come up with a common stance on the key issues affecting regional and global trade and most importantly, on where they can play that shared leadership role.

Commitment on enforcing stand still must come from the highest political level. Leaders from many East Asian countries have reiterated their commitment to ‘promoting free trade’ but they have not been explicit in ‘enforcing a standstill’. East Asia can exert a credible shared leadership on trade if regional countries agree to do a number of things. East Asians should have the confidence that they can afford to do so. Japan was the first country to pledge to provide resources to the IMF. At Davos the Japanese Prime Minister made another pledge to provide aid to other East Asian countries to help overcome the crisis. China has demonstrated its ‘openness’ to trade by dispatching a trade delegation on a ‘Buy European’ campaign. But they and other East Asian countries need to focus on collective efforts to be able to exercise an effective leadership role to keep trade open.

Firstly, they will commit to use their actual tariff rates rather then their bound tariff rates as reference. This is the time for East Asia to make that move. They need not make this a part of their negotiations in the Doha Round, but they can be rest assured that this significant decision will not be left unnoticed in that Round. East Asian countries can proudly show that actual tariff rates in the region have fallen much faster than in other regions since the conclusion of the Uruguay Round. However, their bound tariff rates remain high.

Secondly, East Asian countries also need to support this move by setting up a system of monitoring compliance with their commitments. In their recent meeting in New Zealand, the APEC business advisory council (ABAC), representing the business community in the broader region – including East Asia, called for the creation of such a system. East Asian (or APEC) governments should grab this proposal and direct it back to the business community to immediately establish an ‘independent’ monitoring system. Unlike the EU, East Asia (or APEC) does not have a body such as the European Commission to undertake that task. It appears that even in Europe this cannot be taken for granted as indicated by the recent urging by the Danish premier Rasmussen to the Commission to make sure that EU rules on free trade be upheld by the members. The system must focus on protectionist measures that come in disguised forms.

It may well be that a region-wide consultation is in the offing. At the sidelines of the ASEAN Summit at end of February in Thailand, the Singapore Prime Minister, as chair of the 2009 APEC has taken the initiative to have meetings with the Indonesian President and the ASEAN Chair (the Thai Prime Minister), who will both be at the London Summit. They discussed the global crisis as well as trade issues and regional economic integration. The three leaders need to follow this up with approaches to other East Asian G20 leaders, including Australia and India. South Korea, the next chair of the G20, should immediately be drawn into this endeavor.

An East Asian role in the global context helps to strengthen its own regional endeavors, including deepening regional economic integration. East Asia can also demonstrate to the world the real meaning of ‘open regionalism’, namely to organize the region for the well-being of the region and the world at large.

This post is adapted from Hadi Soesastro’s contribution to a Vox Ebook, entitled The collapse of global trade, murky protectionism and the crisis: recommendations for the G20, which can be found here.