Beyond the Golden Era: Asia Pacific Cooperation After the Global Financial Crisis

The half century leading up to the crisis of 2008-2009 was the best such period in world economic history, especially in the Asia Pacific. Peace and relative economic stability permitted unprecedented liberalization, economic integration, and advances in productivity and growth. But the institutions and strategies of this system are hitting roadblocks. Economic power has become more diffuse and the challenges for cooperation more complex. The world trading system may be entering a period of “contested stability”—continuity with limited prospects for forward progress. In this system cooperation will involve managing interdependence rather than negotiating new agreements. A new, layered approach to cooperation is likely to emerge, with stronger bilateral and regional mechanisms complementing weaker global processes, such as the G-20. World growth need not suffer if new, distributed drivers of productivity emerge to replace deepening economic integration as the engine of progress.