Far removed from today's headlines for the most part, a small but highly influential group of major trading countries has been meeting over the past two years to map out the next generation of trade rules for the Asia-Pacific region.
This collective, unexcitingly called the Trans-Pacific Partnership, originated from a grouping formed in 2005, not by the United States or any of the region's economic heavyweights, but by Brunei, Chile, New Zealand and Singapore. Since then, five other economies - the US, Australia, Malaysia, Peru and Vietnam - have signed on and are now negotiating what is being billed as a "cutting edge, 21st-century trade agreement", with ambitions to push the envelop on trade liberalisation and venture where the World Trade Organisation and Apec have largely failed.
With most tariff barriers in the region removed by free trade agreements or previous trade rounds, what remains are the so-called "behind-the-border" impediments to trade and investment. This is where the Trans-Pacific Partnership is trying to be a pioneer, and its proponents are pinning hopes on it becoming the vehicle that takes us towards a future free trade agreement that would include all members of Asia-Pacific Economic Co-operation forum.
Negotiators for the partnership, who will meet again from today, have been down in the trenches fashioning new rules on such arcana as regulatory convergence, supply chain management and cross-border services trade. While hardly sexy, these issues are the indispensible facilitators of global trade. The grouping is also making a big fuss about its efforts to help out the region's small and medium-sized enterprises.
Most of these "emerging" trade areas are where Hong Kong already has unique advantages. For example, its firms are leading innovators of supply chain management and service know-how. Further liberalisation of services, now over 90 per cent of its gross domestic product, will undoubtedly play to Hong Kong's strengths and help stimulate growth and employment. Given that most members of the grouping are major service economies, the partnership offers Hong Kong a fast-track services liberalisation agenda consistent with its stated economic goals.
Yet Hong Kong is completely missing in action from the negotiations and has chosen not to even send observers, as Japan has done. When asked about regional trade arrangements, Hong Kong officials like to trot out the usual mantra citing their preference for multilateralism over regional trade deals.
While Hong Kong's total trade with the current negotiating partners, now only about 14 per cent, may seem insignificant, that figure rises to close to 30 per cent when we include prospective members, such as Japan, Korea and Taiwan, as well as Canada and Mexico who have made recent moves to join. Looking just at services, Hong Kong's trade with this same grouping exceeded 40 per cent of the total in 2010. By sitting out the Trans-Pacific Partnership, Hong Kong risks not only losing bargaining power in any future services negotiations and but also falling behind a growing pack moving up the liberalisation ladder.
Hong Kong likes to think of itself as a regional hub, but its spokes point mainly in one direction. If it is to realise its self-proclaimed status as a leading regional financial and services centre, the city needs to be more ambitious and innovative in its trade agenda.
If the region is to reap the benefits of moving towards a single market, trade rules that address "behind-the-border" barriers need to be firmly established. Hong Kong, with the freest economy in the world, has so much to offer the partnership, and equally much to gain.
The Apec summit presents Hong Kong with an opportunity to step up to the plate and request its rightful place at the table in defining the next century's trade rules.
Martin Murphy is a former US diplomat now studying at HKU's Journalism and Media Studies Centre